Chapter 05 – Financial Services: Savings Plans and Payment Accounts
1. (p. 143) Higher returns on savings will usually result in less liquidity.
2. (p. 143) A “free” checking account with a minimum balance of $500 has an opportunity cost
of lost interest.
3. (p. 142) All-in-one accounts may be used by financial institutions to simplify the maze of
financial services and to attract customers.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
4. (p. 142) An asset management account combines several financial services for a single fee.
5. (p. 143) Using a “debit” card is basically the same as writing a check.
6. (p. 141) Demand deposits are another term for checking accounts.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
7. (p. 145) Savings and loan associations offer mortgages.
8. (p. 146) Credit unions frequently offer lower loan rates than other financial institutions.
9. (p. 148) The money market fund offered by investment companies is a relatively liquid
financial service.
10. (p. 150) A regular savings account usually offers a higher rate of return to savers than other
savings plans.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
11. (p. 150) A certificate of deposit is usually considered to be very liquid.
12. (p. 154) The more frequent the compounding, the less a person will earn on a savings
account.
13. (p. 162) A restrictive endorsement will usually include the words “for deposit only.”
14. (p. 163) When preparing a bank reconciliation, interest earned on your checking account is
added to the bank statement balance.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
15. (p. 141) A trust has the purpose of:
16. (p. 141) The storage of funds for future use is a purpose of ____________ services.
17. (p. 142) An all-purpose account that provides several services is a(n):
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
18. (p. 144) Joan Zemke expects interest rates to decline over the next few months. To maximize
her earnings she should use a(n):
19. (p. 143) The purpose of a debit card is to:
20. (p. 144) When interest rates are rising, a person would be best served by:
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
21. (p. 141) Checking accounts are frequently referred to as ____________ deposits.
22. (p. 141) Time deposits consist of:
23. (p. 143) Which of the following statements regarding debit and credit card liability is
correct?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
24. (p. 145) Traditionally, the greatest variety of financial services is offered by:
25. (p. 147) To avoid high fees for loans, a person should avoid borrowing from a:
26. (p. 145) The profits from a mutual savings bank go to the:
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
27. (p. 146) In recent years, membership in credit unions has:
28. (p. 146) An advantage credit unions may have over other financial institutions is:
29. (p. 148) The major service offered by investment companies is:
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
30. (p. 149) The business hours and location of a financial institution refer to the ____________
factor of selecting a financial institution.
31. (p. 150) A savings account at a credit union is called a ____________ account.
32. (p. 150) A certificate of deposit usually has:
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
33. (p. 150) A saver will usually earn the highest rate with which one of the following types of
savings plans?
34. (p. 151) Which one of the following savings plans is not covered by federal deposit
insurance?
35. (p. 152) Which is an advantage of investing in Series EE U.S. Savings Bonds?
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
36. (p. 154) The rate of return on a savings account is also referred to as:
37. (p. 154) A $200 savings account that earns $13 interest in a year has a yield of
____________ percent.
38. (p. 154) Savings compounded ____________ would have the highest effective yield.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
39. (p. 155) The Truth-in-Savings law requires that financial institutions:
40. (p. 155) Comparison of earnings for different savings plans can best be accomplished using
the:
41. (p. 157) The Federal Deposit Insurance Corporation provides deposit insurance for:
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
42. (p. 144) Which of the following is an effective strategy in times of falling interest rates?
43. (p. 161) The Expedited Funds Availability Act requires that funds be available to depositors:
44. (p. 160) 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 (an):
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
45. (p. 162) The purpose of a “special” endorsement is to:
46. (p. 162) A ____________ endorsement would be used if a person is presenting a check in
order to obtain cash.
47. (p. 162) A endorsement is especially useful when you are depositing checks.
Chapter 05 – Financial Services: Savings Plans and Payment Accounts
48. (p. 163) When preparing a bank reconciliation, outstanding checks should be:
49. (p. 163) In the bank reconciliation process, service fees should be:
50. (p. 163) 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