Chapter 4 Review

  1. A regular savings account usually offers a higher rate of return to savers than other savings plans.
  2. True.
  3. False.
  4. Traditionally, the greatest variety of financial services have been offered by a(n)
  5. credit union.
  6. investment company.
  7. mutual savings bank.
  8. savings and loan association.
  9. commercial bank.
  10. Demand deposits is another term for checking accounts.
  11. True.
  12. False.
  13. A ______endorsement would be used if a person is presenting a check in order to obtain cash.
  14. restrictive
  15. common
  16. special
  17. blank
  18. documented
  19. A service designed for people who write only a few checks each month is a(n) ______account.
  20. debit
  21. regular checking
  22. share draft
  23. special or activity
  24. When interest rates are rising, a person would be best served by
  25. short-term savings instruments.
  26. long-term savings instruments.
  27. short-term loans.
  28. variable-rate loans.
  29. A trust has the purpose of
  30. solving a person’s financial problems.
  31. obtaining low-interest loans.
  32. handling daily money management activities.
  33. managing the assets of a person.
  34. improving a person’s budgeting skills.
  1. A financial institution organized for the main purpose of providing loans to purchase homes is a
  2. credit union.
  3. mutual savings bank.
  4. consumer finance company.
  5. mortgage company.
  6. commercial bank.
  7. The Federal Deposit Insurance Corporation provides deposit insurance for
  8. credit unions and mutual savings banks.
  9. commercial banks and savings and loan associations.
  10. investment companies and finance companies.
  11. insurance companies and credit unions.
  12. A savings account at a credit union is called a ______account.
  13. share
  14. debit
  15. club
  16. certificate
  17. money market
  18. In recent years, membership in credit unions has
  19. become more difficult due to higher taxes.
  20. continues to increase.
  21. been limited to government employees.
  22. declined due to poor credit union management.
  23. stayed at about the same level.
  24. In the bank reconciliation process, service fees should be
  25. added to the bank statement balance.
  26. subtracted from the bank statement balance.
  27. added to the checkbook balance.
  28. subtracted from the checkbook balance.
  29. Activity accounts are designed for people who write many checks each month.
  30. True.
  31. False.
  32. The storage of funds for future use is the purpose of ______services.
  33. trust
  34. borrowing
  35. credit card
  36. savings
  37. cash checking
  38. Consumer finance companies specialize in home mortgages.
  39. True.
  40. False.
  1. Savers should always attempt to obtain an interest rate that is less than the inflation rate.
  2. True.
  3. False.
  4. The first information to be recorded when writing a check is the
  5. date.
  6. check stub or check register.
  7. payee.
  8. amount.
  9. signature.
  10. Which of the following savings plans is not covered by federal deposit insurance?
  11. A passbook account.
  12. A regular checking account.
  13. A money market account.
  14. A money market fund.
  15. A certificate of deposit.
  16. When preparing a bank reconciliation, interest earned on your checking account is added to the bank statement balance.
  17. True.
  18. False.
  19. The rate of return on a savings account is also referred to as
  20. liquidity.
  21. compounding.
  22. yield.
  23. insolvency.
  24. asset management.

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Chapter 4 Review

Personal Finance 1200-C