FINC 300 - Final Exam || Guaranteed Pass.
For a consumer who does not have a checking account a prepaid debit card is a means of paying
for goods and services. (T/F) correct answers True
Which of the following financial institutions is a not−for−profit organization that is open only to
members of that institution and tends to offer more favorable interest rates to borrowers and
savers?
A. Credit union
B. Commercial bank
C. Savings bank
D. Savings and loan association
E. None of the above are correct. correct answers A. Credit union
Which of the following is not a liquid asset?
A. CDs
B. Money market funds
C. Checking accounts
D. Credit cards correct answers D. Credit cards
When comparing returns on cash management investment alternatives, it is important to make
sure that the rates you compare are all on the same tax basis. (T/F) correct answers True
When using an ATM, keep in mind that
A. it is never safe to deposit cash in an ATM.
B. you should report electronic transaction mistakes to the bank immediately.
,C. computer errors can occur.
D. human problems in handling the transactions can occur.
E. All of the above are correct. correct answers E. All of the above are correct.
One way to think of liquid assets is as a reservoir, with money moving in as wages are received
and moving out as living expenses are paid. (T/F) correct answers True
Brick−and−mortar banks typically offer superior interest rates for borrowers and savers. (T/F)
correct answers False
A money order is typically less liquid than a personal check. (T/F) correct answers False
Liquid assets allow you to cover unplanned expenses without having to interrupt your
long−term investments or liquidate any tangible assets. (T/F) correct answers True
The interest rate earned on a money market deposit account is generally higher than the interest
earned on a Bank savings account. (T/F) correct answers True
When college students start saving early
A. in an account earning interest, they immediately put their money to work.
B. they can take advantage of the time value of money and achieve their financial goals.
C. by automating their savings, they are less likely to spend money.
D. all of the above. correct answers D. all of the above.
Online banking simplifies cash management and budgeting for consumers. (T/F) correct answers
True
,The APY is the APR after taxes. (T/F) correct answers False
The FDIC and the National Credit Union Association insures accounts up to
A. $270,000.
B. $250,000.
C. $300,000.
D. $150,000. correct answers B. $250,000.
Liquid assets or funds are important to
A. prevent overdrafts in checking accounts.
B. prevent interrupting your long−term investments.
C. cover some planned expenses.
D. cover unplanned expenses.
E. All of the above are correct. correct answers E. All of the above are correct.
Card−blocking occurs when you use a debit card (or credit card) to check into a hotel or rent a
car and the anticipated expenses are blocked−in effect, placing a hold on the money. (T/F)
correct answers True
Financial institutions that provide traditional checking and savings accounts are commonly
referred to as
A. nondeposit−type financial institutions.
B. deposit−type financial institutions.
C. financial brokerage companies.
D. personal depository institutions.
, E. None of the above are correct. correct answers B. deposit−type financial institutions.
Which of the following is not a common fee arrangement for checking accounts?
A. Minimum balance requirement
B. Balance−dependent scaled fees
C. Variable interest rates to reflect fee activity
D. Monthly fee
E. Charge per check correct answers C. Variable interest rates to reflect fee activity
Pay yourself first refers to
A. buy the house you've always dreamed of.
B. buy that car you've been wanting.
C. head out on a exotic vacation.
D. put money in a savings account. correct answers D. put money in a savings account.
Money−market mutual funds (MMMFs) provide an alternative to traditional liquid investments
offered by financial institutions. What are/is the advantage(s) of an MMMF?
A. Convenience—deposits made through payroll deductions
B. High interest rates
C. Minimal risk
D. Check−writing privileges
E. All of the above are correct. correct answers E. All of the above are correct.
Please choose the method to use when calculating the after-tax return.
For a consumer who does not have a checking account a prepaid debit card is a means of paying
for goods and services. (T/F) correct answers True
Which of the following financial institutions is a not−for−profit organization that is open only to
members of that institution and tends to offer more favorable interest rates to borrowers and
savers?
A. Credit union
B. Commercial bank
C. Savings bank
D. Savings and loan association
E. None of the above are correct. correct answers A. Credit union
Which of the following is not a liquid asset?
A. CDs
B. Money market funds
C. Checking accounts
D. Credit cards correct answers D. Credit cards
When comparing returns on cash management investment alternatives, it is important to make
sure that the rates you compare are all on the same tax basis. (T/F) correct answers True
When using an ATM, keep in mind that
A. it is never safe to deposit cash in an ATM.
B. you should report electronic transaction mistakes to the bank immediately.
,C. computer errors can occur.
D. human problems in handling the transactions can occur.
E. All of the above are correct. correct answers E. All of the above are correct.
One way to think of liquid assets is as a reservoir, with money moving in as wages are received
and moving out as living expenses are paid. (T/F) correct answers True
Brick−and−mortar banks typically offer superior interest rates for borrowers and savers. (T/F)
correct answers False
A money order is typically less liquid than a personal check. (T/F) correct answers False
Liquid assets allow you to cover unplanned expenses without having to interrupt your
long−term investments or liquidate any tangible assets. (T/F) correct answers True
The interest rate earned on a money market deposit account is generally higher than the interest
earned on a Bank savings account. (T/F) correct answers True
When college students start saving early
A. in an account earning interest, they immediately put their money to work.
B. they can take advantage of the time value of money and achieve their financial goals.
C. by automating their savings, they are less likely to spend money.
D. all of the above. correct answers D. all of the above.
Online banking simplifies cash management and budgeting for consumers. (T/F) correct answers
True
,The APY is the APR after taxes. (T/F) correct answers False
The FDIC and the National Credit Union Association insures accounts up to
A. $270,000.
B. $250,000.
C. $300,000.
D. $150,000. correct answers B. $250,000.
Liquid assets or funds are important to
A. prevent overdrafts in checking accounts.
B. prevent interrupting your long−term investments.
C. cover some planned expenses.
D. cover unplanned expenses.
E. All of the above are correct. correct answers E. All of the above are correct.
Card−blocking occurs when you use a debit card (or credit card) to check into a hotel or rent a
car and the anticipated expenses are blocked−in effect, placing a hold on the money. (T/F)
correct answers True
Financial institutions that provide traditional checking and savings accounts are commonly
referred to as
A. nondeposit−type financial institutions.
B. deposit−type financial institutions.
C. financial brokerage companies.
D. personal depository institutions.
, E. None of the above are correct. correct answers B. deposit−type financial institutions.
Which of the following is not a common fee arrangement for checking accounts?
A. Minimum balance requirement
B. Balance−dependent scaled fees
C. Variable interest rates to reflect fee activity
D. Monthly fee
E. Charge per check correct answers C. Variable interest rates to reflect fee activity
Pay yourself first refers to
A. buy the house you've always dreamed of.
B. buy that car you've been wanting.
C. head out on a exotic vacation.
D. put money in a savings account. correct answers D. put money in a savings account.
Money−market mutual funds (MMMFs) provide an alternative to traditional liquid investments
offered by financial institutions. What are/is the advantage(s) of an MMMF?
A. Convenience—deposits made through payroll deductions
B. High interest rates
C. Minimal risk
D. Check−writing privileges
E. All of the above are correct. correct answers E. All of the above are correct.
Please choose the method to use when calculating the after-tax return.
