Question 1

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)  convenienceF) B) and C)
G) C) and D)

Question 2

A cashier's cheque is what type of short term financial service?

Accepted Answer

A)  Savings
B)  Chequing
C)  Credit Card
D)  Cash availability
E)  InvestmentF) A) and B)
G) A) and C)

Question 3

Short term financial servies for short term needs include which one of the following?

Accepted Answer

A)  Cheque cashing
B)  Cash loans for autos
C)  RRSP's
D)  Insurance
E)  Budget counsellingF) C) and D)
G) B) and C)

Question 4

What is a drawback of a Guaranteed Investment Certificate?

Accepted Answer

A)  Low rate of return
B)  Minimum deposit
C)  Service charges
D)  High minimum balance required
E)  Not guaranteedF) A) and C)
G) None of the above

Question 5

Which of these is not a characteristic of the compound interest bond?

Accepted Answer

A)  various purchase options
B)  denominations of $100 up to $10,000
C)  interest paid on November 1 of each year
D)  can be purchased by cash
E)  cashable at any time for their face valueF) All of the above
G) D) and E)

Question 6

The yield on a savings account is also referred to as

Accepted Answer

A)  liquidity.
B)  compounding.
C)  asset management.
D)  insolvency.
E)  rate of return.F) A) and D)
G) B) and C)

Question 7

A cash advance is what type of short term financial service?

Accepted Answer

A)  Savings
B)  Chequing
C)  Credit Card
D)  Cash availability
E)  InvestmentF) D) and E)
G) B) and E)

Question 8

A "free" chequing account with a minimum balance of $500 has no opportunity cost.

Accepted Answer

A) True 
 B)False

Question 9

Briana Legett expects interest rates to decline over the next few months.To maximize her earnings she should use a(n) :

Accepted Answer

A)  regular savings account.
B)  interest-bearing checking account.
C)  five-year certificate of deposit.
D)  six-month certificate of deposit.
E)  money market fundF) None of the above
G) A) and C)

Question 10

Comparison of earnings for different savings plans can best be accomplished using the

Accepted Answer

A)  discounted present value.
B)  compounded rate of return.
C)  net present value.
D)  effective annual rate.
E)  after-tax rate of return.F) A) and B)
G) C) and E)

Question 11

A "free" chequing account with a minimum balance of $500 has an opportunity cost of lost interest.

Accepted Answer

A) True 
 B)False

Question 12

Which of the flowing is not a benefit of online banking?

Accepted Answer

A)  Time savings
B)  No paper trail
C)  Email notices of due dates
D)  Phishing
E)  ConvenienceF) A) and B)
G) C) and D)

Question 13

A $100 savings account that earns $5 interest in a year has a yield of ____________ percent.

Accepted Answer

A)  6
B)  5
C)  4.75
D)  3.75
E)  6.5F) C) and E)
G) C) and D)

Question 14

A regular savings account usually offers a lower rate of return to savers than other savings plans.

Accepted Answer

A) True 
 B)False

Question 15

The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with

Accepted Answer

A)  safety.
B)  personal service.
C)  growth of savings.
D)  liquidity.
E)  a lower rate of return.F) C) and E)
G) C) and D)

Question 16

Robert expects interest rates to rise over the next few months.To maximize his earnings he should use a:

Accepted Answer

A)  regular savings account.
B)  five year GIC.
C)  five-year certificate of deposit.
D)  six-month certificate of deposit.
E)  money market fundF) A) and B)
G) None of the above

Question 17

Foreign currency exchange is what type of short term financial service?

Accepted Answer

A)  Savings
B)  Chequing
C)  Credit Card
D)  Cash availability
E)  InvestmentF) D) and E)
G) B) and C)

Question 18

What is a drawback of a money market fund?

Accepted Answer

A)  Low rate of return
B)  Minimum deposit
C)  Service charges
D)  High minimum balance required
E)  Not guaranteedF) C) and D)
G) B) and C)

Question 19

A restrictive endorsement will usually include the words "for deposit only."

Accepted Answer

A) True 
 B)False

Question 20

The rate of return on a savings account is also referred to as

Accepted Answer

A)  liquidity.
B)  compounding.
C)  asset management.
D)  insolvency.
E)  yield.F) C) and E)
G) D) and E)

Exam 4: Banking Services of Financial Institutions

The rate of return on a savings account is also referred to as

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Comparison of earnings for different savings plans can best be accomplished using the

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Foreign currency exchange is what type of short term financial service?

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What is a drawback of a Guaranteed Investment Certificate?

Correct AnswerverifiedShow Answer

A restrictive endorsement will usually include the words "for deposit only."

Correct AnswerverifiedShow Answer

Short term financial servies for short term needs include which one of the following?

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Which of these is not a characteristic of the compound interest bond?

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The yield on a savings account is also referred to as

Correct AnswerverifiedShow Answer

A regular savings account usually offers a lower rate of return to savers than other savings plans.

Correct AnswerverifiedShow Answer

A "free" chequing account with a minimum balance of $500 has an opportunity cost of lost interest.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A $100 savings account that earns $5 interest in a year has a yield of ____________ percent.

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What is a drawback of a money market fund?

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A "free" chequing account with a minimum balance of $500 has no opportunity cost.

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The convenience of using a financial institution with 24-hour banking frequently requires a trade-off with

Correct AnswerverifiedShow Answer

A cash advance is what type of short term financial service?

Correct AnswerverifiedShow Answer

A cashier's cheque is what type of short term financial service?

Correct AnswerverifiedShow Answer

Robert expects interest rates to rise over the next few months.To maximize his earnings he should use a:

Correct AnswerverifiedShow Answer

Briana Legett expects interest rates to decline over the next few months.To maximize her earnings she should use a(n) :

Correct AnswerverifiedShow Answer

Which of the flowing is not a benefit of online banking?

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