Question 1

The face value of a Series EE U.S. Savings Bond refers to the:

Accepted Answer

A)   original purchase price.
B)   redemption value at maturity.
C)   effective yield of the bond.
D)   monthly interest accrual amount.
E)   taxable portion of the accrued interest.

Question 2

The profits from a mutual savings bank go to the:

Accepted Answer

A)   creditors.
B)   loan applicants.
C)   stockholders.
D)   depositors.
E)   community in which it operates.

Question 3

An asset management account combines several financial services for a single fee.

Accepted Answer

A) True 
 B)False

Question 4

Which law requires banks and other financial institutions to disclose fees, the annual percentage yield, and the other terms and conditions on checking and savings accounts?

Accepted Answer

A)   Truth in Savings Law
B)   Truth in Lending Law
C)   Expedited Funds Availability Act
D)   Equal Employment Opportunity Act
E)   Identity Theft Protection Act

Question 5

You are planning to purchase a house in five years and intend to save a fixed amount of money each month for a down payment. How will you invest your savings and what are important considerations in selecting an investment vehicle?

Accepted Answer

The answer of You are planning to purchase a house...

Question 6

The Expedited Funds Availability Act requires that funds be available to depositors:

Accepted Answer

A)   within 5 days for local checks.
B)   within 2 days for local checks.
C)   within 2 days for both local checks and out-of-town checks.
D)   within 2 days for out-of-town checks.
E)   immediately upon deposit.

Question 7

A ____________ endorsement would be used if a person is presenting a check in order to obtain cash.

Accepted Answer

A)   restrictive
B)   common
C)   special
D)   blank
E)   documented

Question 8

Demand deposits are another term for checking accounts.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following institutions is organized primarily to provide loans to purchase homes?

Accepted Answer

A)   Life insurance company
B)   Finance company
C)   Mortgage company
D)   Pawn shop
E)   Investment company

Question 10

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

Accepted Answer

A)   Certificate of deposit
B)   Debit account
C)   Passbook account
D)   Share account
E)   NOW account

Question 11

Which of the following is an effective strategy in times of falling interest rates?

Accepted Answer

A)   Use long-term loans to take advantage of current low rates.
B)   Use short-term loans to take advantage of lower rates when you refinance the loans.
C)   Select short-term savings instruments to take advantage of higher rates when they mature.
D)   Select short-term savings instruments to lock-in earnings at current high rates.
E)   Select long-term savings instruments to lock-in earnings at current low rates.

Question 12

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.

Question 13

The Truth-in-Savings law requires that financial institutions:

Accepted Answer

A)   provide insurance for savings accounts.
B)   send customers monthly bank statements.
C)   report annual percentage yield on savings.
D)   offer adjustable rate savings accounts.
E)   become members of the Federal Reserve System.

Question 14

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

Accepted Answer

The answer of What are the main types of financial...

Question 15

Which of the following institutions makes loans based on the value of tangibles possessions, such as jewelry and collectibles?

Accepted Answer

A)   Life insurance company
B)   Finance company
C)   Mortgage company
D)   Pawn shop
E)   Investment company

Question 16

Which of the following types of financial institutions provide Federal Deposit Insurance (FDIC)  coverage?

Accepted Answer

A)   Credit card companies and finance companies
B)   Credit unions and brokerage firms
C)   Mortgage companies, commercial banks, and credit unions
D)   Commercial banks, credit unions, and savings and loans
E)   Commercial banks, credit card companies, and credit unions

Question 17

Determine the rate of return (yield)  on a savings account in which you deposited $300.00 and earned $6.00 in interest after one year.

Accepted Answer

A)   5.00%
B)   0.05%
C)   2.00%
D)   0.20%
E)   18.00%

Question 18

Which one of the following savings plans is not covered by federal deposit insurance?

Accepted Answer

A)   Passbook account at a savings and loan
B)   Regular checking account at a commercial bank
C)   Money market account at a commercial bank
D)   Money market fund with an investment company
E)   Certificate of deposit at a commercial bank

Question 19

The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.

Accepted Answer

A)   safety
B)   cost
C)   compounding
D)   liquidity
E)   convenience

Question 20

Which CD attempts to attract savers with gifts or special rates?

Accepted Answer

A)   Bump-up
B)   Indexed
C)   Callable
D)   Global
E)   Promotional

Exam 5: Financial Services: Savings Plans and Payment Accounts

Which of the following types of financial institutions provide Federal Deposit Insurance (FDIC) coverage?

Correct AnswerverifiedShow Answer

The profits from a mutual savings bank go to the:

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Determine the rate of return (yield) on a savings account in which you deposited $300.00 and earned $6.00 in interest after one year.

Correct AnswerverifiedShow Answer

The Expedited Funds Availability Act requires that funds be available to depositors:

Correct AnswerverifiedShow Answer

Which CD attempts to attract savers with gifts or special rates?

Correct AnswerverifiedShow Answer

Which of the following is an effective strategy in times of falling interest rates?

Correct AnswerverifiedShow Answer

The face value of a Series EE U.S. Savings Bond refers to the:

Correct AnswerverifiedShow Answer

Which of the following institutions makes loans based on the value of tangibles possessions, such as jewelry and collectibles?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The Truth-in-Savings law requires that financial institutions:

Correct AnswerverifiedShow Answer

The business hours and location of a financial institution refer to the ____________ factor of selecting a financial institution.

Correct AnswerverifiedShow Answer

Demand deposits are another term for checking accounts.

Correct AnswerverifiedShow Answer

A ____________ endorsement would be used if a person is presenting a check in order to obtain cash.

Correct AnswerverifiedShow Answer

Which law requires banks and other financial institutions to disclose fees, the annual percentage yield, and the other terms and conditions on checking and savings accounts?

Correct AnswerverifiedShow Answer

Which of the following institutions is organized primarily to provide loans to purchase homes?

Correct AnswerverifiedShow Answer

You are planning to purchase a house in five years and intend to save a fixed amount of money each month for a down payment. How will you invest your savings and what are important considerations in selecting an investment vehicle?

Correct AnswerverifiedShow Answer

In recent years, membership in credit unions has:

Correct AnswerverifiedShow Answer

Which one of the following savings plans is not covered by federal deposit insurance?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An asset management account combines several financial services for a single fee.

Correct AnswerverifiedShow Answer

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