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Exam 4: Managing Your Cash and Savings

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Question 1

Multiple Choice

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Which of the following statements regarding the cost of a checking account is true?

A) Most banks and other depository institutions allow unlimited free check-writing privileges.
B) Most banks charge a fee when a checking account balance drops below a required minimum.
C) Most banks use the daily balance in an account to determine whether to levy a service charge.
D) The average charge of a returned check is between $35 and $50.
E) Most banks do not charge for using the automated teller machine (ATM) of another bank that is not a member of the same network.

Correct Answer

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B

Question 2

Multiple Choice

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Macie has $25 in her checking account when her electronic funds transfer system (EFTS) card and personal identification number (PIN) are stolen. If Macie notifies her bank tomorrow, the day after the theft of her card, her loss is limited to:

A) $0.
B) $25.
C) $50.
D) $400.
E) $500.

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Question 3

Multiple Choice

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Savings deposits are also known as:

Which of the following is a rented drawer in a bank's vault?

Christina's bank allows her employer to directly deposit her paycheck into her personal bank account. This service provided by Christina's bank is called a(n) :

Visa and MasterCard issue debit cards linked to your checking account.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. A negative inflation-adjusted real interest rate is [ good | bad ] for the overall economy.

In which of the following states would you most likely find a savings bank?

Your savings will grow faster with monthly interest compounding than with quarterly interest compounding for a given nominal interest rate.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. You would expect to find an asset management account (MMA) at a [ commercial bank | brokerage firm ].

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. [ I savings bonds  | Treasury bills ] are sold at face value.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. "For deposit only" would indicate a [ blank | restrictive ] endorsement.

Credit unions are:

A safe-deposit box in a bank can be opened only when the:

Banks must notify customers _____ days in advance before lowering rates on deposit accounts or certificates of deposit (CDs) .

Interest earned for a period should be added to the ending balance shown in your checkbook while reconciling your account.

Funds in commercial banks are protected by the:

You had $800 in your checking account when your electronic funds transfer system (EFTS) card and personal identification number (PIN) were stolen. You didn't report the theft for 2 months after your periodic statement was mailed. How much could you lose?

Money market mutual funds (MMMFs) :

The Federal Deposit Insurance Corporation (FDIC) insures each _____  up to a stated maximum dollar amount at any given financial institution.