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Exam 5: Financial Services: Savings Plans and Payment Accounts

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Question 41

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The Federal Deposit Insurance Corporation insures deposits up to $250,000 per person per financial institution.Suzanne has $200,000 in an individual account and $424,000 in a joint account with her husband,Ted.How much of Suzanne's money is not covered by FDIC insurance?

A) $162,000
B) $174,000
C) $374,000
D) $50,000
E) $0

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Question 42

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Josh earned $120 on $1500 invested in a high yield money market account.He is taxed at 28% of his earnings.What is the effective yield on his investment?

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Question 43

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Credit unions frequently offer lower loan rates than other financial institutions.

The storage of funds for future use is a purpose of ____________ services.

A pawnshop with a monthly interest rate of 2.75 percent would have an annual interest rate of ____ percent.Ignore compounding.

A person borrows $200 from a payday loan company,and pays $10 interest for two weeks.This would result in an annual interest rate of approximately ___ percent.Ignore compounding.

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.

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

When preparing a bank reconciliation,interest earned on your checking account is added to the bank statement balance.

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

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

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

Evan Nolan is a college graduate who has just landed a great job.He feels it is time for him to start saving a portion of his earnings.What factors would you recommend he consider when evaluating and comparing different savings plans?

Based on the following information,what amount would be subtracted from the bank balance side of the checking account reconciliation? Service charge $12;Outstanding checks $145;Interest $3.50;Deposit in transit $80

David Wynn gets a personal loan from his credit union for $1,000.David will make monthly payments $85.15 over the next year to repay the loan.What type of financial service is David using?

Checking accounts are frequently referred to as ____________ deposits.

Brad Kellogg maintains a monthly balance in his checking account of approximately $150,writes about 25 checks a month,and makes three deposits each month.How would Brad decide which one of the following checking accounts he should use?

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

Which of the following is a way to reduce ATM surcharges?

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