Question 1

A savings account earns 3 percent.If the saver is in a 22 percent tax bracket,the after-tax savings rate of return would be ________ percent.

Accepted Answer

A)  22.00
B)  19.00
C)  3.00
D)  2.34
E)  0.66

Question 2

Checking accounts are frequently referred to as ________ deposits.

Accepted Answer

A)  common
B)  time
C)  current
D)  loan
E)  demand

Question 3

Demand deposits are another term for checking accounts.

Accepted Answer

A) True 
 B)False

Question 4

Your bank statement shows a balance of $695.Your checkbook register shows a balance of $562.You earned interest of $3 and had a service charge of $5.There are no outstanding deposits.What is the amount of outstanding checks?

Accepted Answer

A)  $135
B)  $160
C)  $133
D)  $6
E)  $0

Question 5

What type of account would be considered the most liquid?

Accepted Answer

A)  3-year certificate of deposit
B)  Regular savings account
C)  Money market account
D)  U) S.savings bond
E)  Share of stock

Question 6

A debit card transaction is processed by a retailer,with the amount of purchases deducted from your checking account by:

Accepted Answer

A)  transferring money electronically.
B)  obtaining a discount on consumer purchases.
C)  making credit card purchases.
D)  quickly obtaining a cash loan.
E)  making investments with an investment company.

Question 7

Which one of the following is not true for PayNearMe transactions?

Accepted Answer

A)  It is used by people without a credit or debit card.
B)  It is used for online transactions.
C)  It allows buyers to make a purchase and then pay cash at a local store.
D)  The customer does not receive a receipt.
E)  The seller is notified of the payment.

Question 8

Series EE bonds continue to earn interest for how many years?

Accepted Answer

A)  10
B)  20
C)  25
D)  30
E)  35

Question 9

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.What are three important considerations in selecting a savings plan?

Accepted Answer

Answers will vary.When evaluating a savi...

Question 10

To avoid high fees for cash loans,a person should avoid borrowing from a:

Accepted Answer

A)  credit union.
B)  savings and loan association.
C)  pawnshop.
D)  commercial bank.
E)  mutual savings bank.

Question 11

What type of account would you expect to provide the poorest yield?

Accepted Answer

A)  Certificate of deposit earning 4% compounded semiannually
B)  Savings account earning 4% compounded annually
C)  Money market account earning 4% compounded monthly
D)  Money market fund earning 4% compounded monthly
E)  Savings account earning 4% compounded semiannually

Question 12

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

Accepted Answer

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

Question 13

The business hours and ATM locations of a financial institution refer to the ________ feature when selecting a financial institution.

Accepted Answer

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

Question 14

Determine the rate of return on a savings account in which you deposited $200.00 and earned $5.00 in interest after one year.

Accepted Answer

A)  5.00%
B)  0.05%
C)  2.50%
D)  0.20%
E)  18.00%

Question 15

When interest rates are rising,a person should select:

Accepted Answer

A)  short-term savings instruments.
B)  long-term savings instruments.
C)  short-term loans.
D)  variable-rate loans.
E)  five-year certificates of deposit.

Question 16

Which of the following has the main purpose of issuing a policy that provides financial security for dependents?

Accepted Answer

A)  Life insurance company
B)  Commercial bank
C)  Savings and loan association
D)  Credit union
E)  Mutual savings bank

Question 17

Which CD starts with a higher rate,has a long time to maturity,and can be closed by the bank after a set time period?

Accepted Answer

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

Question 18

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

Accepted Answer

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

Question 19

A $200 savings account that earns $8.50 interest in a year has a yield of ________ percent.

Accepted Answer

A)  2.35
B)  13.00
C)  8.50
D)  11.25
E)  4.25

Question 20

Automatically buying a new CD upon maturity of the current CD is commonly referred to as:

Accepted Answer

A)  creating a CD portfolio.
B)  rolling over.
C)  refinancing.
D)  calling a CD.
E)  bumping up.

Exam 5: Financial Services: Savings Plans and Payment Accounts

A savings account earns 3 percent.If the saver is in a 22 percent tax bracket,the after-tax savings rate of return would be ________ percent.

Correct AnswerverifiedShow Answer

A $200 savings account that earns $8.50 interest in a year has a yield of ________ percent.

Correct AnswerverifiedShow Answer

Which of the following has the main purpose of issuing a policy that provides financial security for dependents?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which CD starts with a higher rate,has a long time to maturity,and can be closed by the bank after a set time period?

Correct AnswerverifiedShow Answer

The business hours and ATM locations of a financial institution refer to the ________ feature when selecting a financial institution.

Correct AnswerverifiedShow Answer

Checking accounts are frequently referred to as ________ deposits.

Correct AnswerverifiedShow Answer

Automatically buying a new CD upon maturity of the current CD is commonly referred to as:

Correct AnswerverifiedShow Answer

Demand deposits are another term for checking accounts.

Correct AnswerverifiedShow Answer

A debit card transaction is processed by a retailer,with the amount of purchases deducted from your checking account by:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Series EE bonds continue to earn interest for how many years?

Correct AnswerverifiedShow Answer

To avoid high fees for cash loans,a person should avoid borrowing from a:

Correct AnswerverifiedShow Answer

When interest rates are rising,a person should select:

Correct AnswerverifiedShow Answer

Determine the rate of return on a savings account in which you deposited $200.00 and earned $5.00 in interest after one year.

Correct AnswerverifiedShow Answer

Which one of the following is not true for PayNearMe transactions?

Correct AnswerverifiedShow Answer

What type of account would you expect to provide the poorest yield?

Correct AnswerverifiedShow Answer

Your bank statement shows a balance of $695.Your checkbook register shows a balance of $562.You earned interest of $3 and had a service charge of $5.There are no outstanding deposits.What is the amount of outstanding checks?

Correct AnswerverifiedShow Answer

What type of account would be considered the most liquid?

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.What are three important considerations in selecting a savings plan?

Correct AnswerverifiedAnswers will vary.When evaluating a savi...View AnswerShow Answer

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Answers will vary.When evaluating a savi...
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