Question 1

Which one of the following will help to avoid identity theft?

Accepted Answer

A)  Put your social security and driver's license numbers on checks.
B)  Put your full name on checks.
C)  Put your full account number on checks when paying a bill.
D)  Use passwords involving both letters and numbers.
E)  Check your credit report once every three years.F) B) and D)
G) A) and B)

Question 2

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

Consider savings opportunities...

Question 3

A savings account at a credit union is called a ____________ account.

Accepted Answer

A)  share
B)  NOW
C)  club
D)  certificate
E)  money marketF) A) and D)
G) B) and D)

Question 4

A limit on the amount you must keep on deposit in order to earn interest or avoid a service charge is an example of a:

Accepted Answer

A)  holding period.
B)  restriction.
C)  overdraft fee.
D)  share draft.
E)  certified deposit fee.F) C) and E)
G) C) and D)

Question 5

A savings account earns 4 percent.If the saver is in a 28 percent tax bracket,the after-tax savings rate of return would be ____percent.

Accepted Answer

A)  28.00
B)  16.72
C)  4.00
D)  2.88
E)  1.12F) C) and E)
G) All of the above

Question 6

Which law requires banks and other financial institutions to disclose fees,the interest rate,the annual percentage yield,and the other terms and conditions on savings account plans?

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 ActF) A) and B)
G) B) and C)

Question 7

What is the term used to refer to the cost of borrowing for large U.S.corporations?

Accepted Answer

A)  Prime rate
B)  Discount rate
C)  Corporate bond rate
D)  Treasury bond rate
E)  T-bill rateF) C) and E)
G) B) and D)

Question 8

Which is an advantage of investing in Series EE U.S.Savings Bonds?

Accepted Answer

A)  When a bond is redeemed, the earned interest is always exempt from federal income taxes.
B)  Federal income tax on earnings is not due until the bonds are redeemed.
C)  The interest rate on the bond is adjusted to keep up with inflation.
D)  Series EE Bonds can be sold at a profit on the open bond market.
E)  The rates on Series EE Bonds are usually higher than the rates offered on stocks or corporate bonds.F) C) and E)
G) B) and C)

Question 9

Prepaid debit cards are used for:

Accepted Answer

A)  Social security benefits.
B)  School lunches.
C)  Highway tolls.
D)  Telephone service.
E)  All of these.F) A) and E)
G) C) and D)

Question 10

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 buying.
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.F) A) and D)
G) A) and C)

Question 11

The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions.

Accepted Answer

A) True 
 B)False

Question 12

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.F) A) and E)
G) A) and B)

Question 13

Demand deposits are another term for:

Accepted Answer

A)  savings accounts.
B)  savings bonds.
C)  checking accounts.
D)  certificates of deposit.
E)  investment accounts.F) C) and D)
G) B) and E)

Question 14

Describe mobile transfer apps and how they work.

Accepted Answer

Apps for mobile payment systems are avai...

Question 15

Demand deposits are another term for checking accounts.

Accepted Answer

A) True 
 B)False

Question 16

Series EE U.S.Savings Bonds can be purchased:

Accepted Answer

A)  for less than $25.
B)  for any amount greater than $25.
C)  for less than face value.
D)  in increments of $25 only.
E)  in whole dollar amounts only.F) A) and B)
G) A) and E)

Question 17

Which is a CD that offers a higher rate for every six months you are invested?

Accepted Answer

A)  Bump-up
B)  Indexed
C)  Callable
D)  Global
E)  PromotionalF) B) and C)
G) C) and D)

Question 18

The Federal Deposit Insurance Corporation provides deposit insurance for:

Accepted Answer

A)  credit unions and mutual savings banks.
B)  commercial banks and savings and loan associations.
C)  investment companies and finance companies.
D)  insurance companies and credit unions.
E)  commercial banks and credit unions.F) C) and E)
G) A) and B)

Question 19

Tim Gleason has set up a legal agreement that allows the First State Bank of Orlando to manage funds set aside for his daughter's college education.What type of financial service is Tim using?

Accepted Answer

A)  Payment service
B)  Savings service
C)  Borrowing service
D)  Trust service
E)  Asset managementF) C) and D)
G) A) and D)

Question 20

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

Accepted Answer

A)  33.00
B)  27.50
C)  20.00
D)  5.50
E)  2.75F) D) and E)
G) A) and E)

Exam 5: Financial Services: Savings Plans and Payment Accounts

The Federal Deposit Insurance Corporation provides deposit insurance for:

Correct AnswerverifiedShow Answer

A savings account earns 4 percent.If the saver is in a 28 percent tax bracket,the after-tax savings rate of return would be ____percent.

Correct AnswerverifiedShow Answer

Which one of the following will help to avoid identity theft?

Correct AnswerverifiedShow Answer

The most frequent users of payday loans are workers who have become trapped by debts or poor financial decisions.

Correct AnswerverifiedShow Answer

A limit on the amount you must keep on deposit in order to earn interest or avoid a service charge is an example of a:

Correct AnswerverifiedShow Answer

Which is a CD that offers a higher rate for every six months you are invested?

Correct AnswerverifiedShow Answer

What is the term used to refer to the cost of borrowing for large U.S.corporations?

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 AnswerverifiedConsider savings opportunities...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Prepaid debit cards are used for:

Correct AnswerverifiedShow Answer

Demand deposits are another term for:

Correct AnswerverifiedShow Answer

Which is an advantage of investing in Series EE U.S.Savings Bonds?

Correct AnswerverifiedShow Answer

Demand deposits are another term for checking accounts.

Correct AnswerverifiedShow Answer

Series EE U.S.Savings Bonds can be purchased:

Correct AnswerverifiedShow Answer

Describe mobile transfer apps and how they work.

Correct AnswerverifiedApps for mobile payment systems are avai...View AnswerShow Answer

Which law requires banks and other financial institutions to disclose fees,the interest rate,the annual percentage yield,and the other terms and conditions on savings account plans?

Correct AnswerverifiedShow Answer

A savings account at a credit union is called a ____________ account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Tim Gleason has set up a legal agreement that allows the First State Bank of Orlando to manage funds set aside for his daughter's college education.What type of financial service is Tim using?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Consider savings opportunities...
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Apps for mobile payment systems are avai...
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