Question 1

A financial institution organized for the main purpose of providing loans to purchase homes is a

Accepted Answer

A)  mortgage and loan company.
B)  mutual savings bank.
C)  consumer finance company.
D)  credit union
E)  commercial bank.F) C) and E)
G) A) and D)

Question 2

Kevin Friedman only needs to write a couple of cheques each month.Which type of chequing account would best serve his needs?

Accepted Answer

A)  an interest-earning chequing account
B)  an activity account
C)  an EFT account
D)  a share draft account
E)  a NOW accountF) A) and B)
G) D) and E)

Question 3

Direct deposit and automatic monthly payments are features of

Accepted Answer

A)  savings accounts.
B)  chequing accounts.
C)  electronic banking.
D)  investments.
E)  reserve funds.F) C) and D)
G) A) and D)

Question 4

What are the main types of financial institutions used by consumers?

Accepted Answer

Deposit-type institutions include charte...

Question 5

The rate of return on a savings account is also referred to as

Accepted Answer

A)  liquidity.
B)  compounding.
C)  asset management.
D)  insolvency.
E)  yield.F) A) and B)
G) B) and D)

Question 6

ATM fees are about the same in different geographic areas.

Accepted Answer

A) True 
 B)False

Question 7

A trust is a safe place for people to make large deposits for maximum security

Accepted Answer

A) True 
 B)False

Question 8

A regular savings account usually offers a higher rate of return to savers than other savings plans.

Accepted Answer

A) True 
 B)False

Question 9

Joan Zemke expects interest rates to decline over the next few months.To maximize her earnings she should use a(n)

Accepted Answer

A)  five-year GIC.
B)  interest-bearing chequing account.
C)  regular savings account.
D)  six-month GIC.
E)  money market fundF) C) and D)
G) A) and D)

Question 10

A $400 savings account that earns $15 interest in a year has a yield of ____________ percent.

Accepted Answer

A)  6
B)  15
C)  4.75
D)  3.75
E)  6.5F) A) and B)
G) B) and D)

Question 11

All financial institutions are able to process customer deposit and withdrawal transactions.

Accepted Answer

A) True 
 B)False

Question 12

Based on the following information,find the true balance of your chequing account and the sum,if any,of deposits in transit.
Balance on bank statement,$581
Total of outstanding cheques,$200
Service charges,$11
Interest earned on account,$7
Balance in your chequebook,$540

Accepted Answer

Reconciled balance =...

Question 13

The money market fund offered by investment companies is a highly liquid financial service.

Accepted Answer

A) True 
 B)False

Question 14

In recent years,membership in credit unions has

Accepted Answer

A)  become more difficult due to higher taxes.
B)  continued to increase.
C)  been limited to government employees.
D)  declined due to poor credit union management.
E)  stayed at about the same level.F) A) and C)
G) D) and E)

Question 15

Based on the following information,what amount would be SUBTRACTED from the BANK BALANCE side of a chequing account reconciliation? Service charge $6,Outstanding cheques $260,Interest $3.00,Deposit in transit $65

Accepted Answer

A)  $260
B)  $65
C)  $67
D)  $68
E)  $266F) A) and B)
G) A) and C)

Question 16

Comparison of earnings for different savings plans can best be accomplished using the

Accepted Answer

A)  discounted present value.
B)  compounded rate of return.
C)  net present value.
D)  effective annual rate.
E)  after-tax rate of return.F) A) and D)
G) A) and B)

Question 17

A saver will usually earn the highest rate with which of the following types of savings plans?

Accepted Answer

A)  Guaranteed Investment Certificates
B)  club account
C)  passbook account
D)  share account
E)  NOW accountF) A) and C)
G) A) and D)

Question 18

The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with

Accepted Answer

A)  safety.
B)  personal service.
C)  growth of savings.
D)  liquidity.
E)  a lower rate of return.F) C) and D)
G) None of the above

Question 19

Lower returns on savings will usually result in less liquidity.

Accepted Answer

A) True 
 B)False

Question 20

Mortgage and loan companies specialize principally in home mortgages and long-term loans.

Accepted Answer

A) True 
 B)False

Exam 4: Financial Services: Savings Plans and Payment Accounts

Comparison of earnings for different savings plans can best be accomplished using the

Correct AnswerverifiedShow Answer

A saver will usually earn the highest rate with which of the following types of savings plans?

Correct AnswerverifiedShow Answer

A financial institution organized for the main purpose of providing loans to purchase homes is a

Correct AnswerverifiedShow Answer

Mortgage and loan companies specialize principally in home mortgages and long-term loans.

Correct AnswerverifiedShow Answer

What are the main types of financial institutions used by consumers?

Correct AnswerverifiedDeposit-type institutions include charte...View AnswerShow Answer

All financial institutions are able to process customer deposit and withdrawal transactions.

Correct AnswerverifiedShow Answer

A regular savings account usually offers a higher rate of return to savers than other savings plans.

Correct AnswerverifiedShow Answer

A trust is a safe place for people to make large deposits for maximum security

Correct AnswerverifiedShow Answer

The rate of return on a savings account is also referred to as

Correct AnswerverifiedShow Answer

The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with

Correct AnswerverifiedShow Answer

ATM fees are about the same in different geographic areas.

Correct AnswerverifiedShow Answer

The money market fund offered by investment companies is a highly liquid financial service.

Correct AnswerverifiedShow Answer

Joan Zemke expects interest rates to decline over the next few months.To maximize her earnings she should use a(n)

Correct AnswerverifiedShow Answer

In recent years,membership in credit unions has

Correct AnswerverifiedShow Answer

A $400 savings account that earns $15 interest in a year has a yield of ____________ percent.

Correct AnswerverifiedShow Answer

Direct deposit and automatic monthly payments are features of

Correct AnswerverifiedShow Answer

Based on the following information,find the true balance of your chequing account and the sum,if any,of deposits in transit. Balance on bank statement,$581 Total of outstanding cheques,$200 Service charges,$11 Interest earned on account,$7 Balance in your chequebook,$540

Correct AnswerverifiedReconciled balance =...View AnswerShow Answer

Kevin Friedman only needs to write a couple of cheques each month.Which type of chequing account would best serve his needs?

Correct AnswerverifiedShow Answer

Lower returns on savings will usually result in less liquidity.

Correct AnswerverifiedShow Answer

Based on the following information,what amount would be SUBTRACTED from the BANK BALANCE side of a chequing account reconciliation? Service charge $6,Outstanding cheques $260,Interest $3.00,Deposit in transit $65

Correct AnswerverifiedShow Answer

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Deposit-type institutions include charte...
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Reconciled balance =...
View Answer

Correct Answer
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