One type of on-line banking called Reoccurring payment allows the customer to:

Set up automatic payments without the need to write checks

How liquid is a savings account?

More liquid than stocks and bonds

The primary purpose of a checking account is to:

Help manage money and make paying bills more convenient

The steady rise in the general level of prices

Consumers benefit from using a checking account because it will:

Keep track of where money is spent

What is compound interest?

The interest earned on both interest and principal

A disadvantage of using online banking is that you do not:

Have face to face interaction with Bank employees

What does “pay yourself first” mean?

You should consider savings to be a fixed expense

Online banking allows the consumer to:

Have 24/7 access to banking transactions

The portion of current income not spent on consumption

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Fin. Lit. Unit 4 Test Review

31 termsStudBud Administration1,180 plays

Savings, investing, stock market, etc

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Questions 31

Answers

1
One type of on-line banking called Reoccurring payment allows the customer to:
Set up automatic payments without the need to write checks
Write checks in advance of the due date for credit card bill
Set up automatic payments of utilities only
Pay by phone certain bills that are paid every month
2
Big name stocks that have a long history of being successful are called:
Growth
Blue-chip
cyclical
Speculative
3
What will $10,000 be worth in 24 years if it is invested at a 6% annual rate of return?
$80,000
$40,000
$10,000
$20,000
4
How liquid is a savings account?
More liquid than stocks and bonds
All of them
More liquid than cash
Less liquid than mutual funds
5
What factor affects the time value of money?
Value
Interest
Time
All of them
6
Interest is considered the price of what?
Goods
Time
Your first born child
Money
7
Generally speaking, the "Higher the rate of return, the __________ the risk."
acceptable
greater
funner
lower
8
Money set aside for short-term goals is usually placed in which of the following accounts?
Savings Account
Certificate of Deposit
401K
Bonds
9
Depository Institutions offer a wide variety of services including:
Financial counseling
Loans and investments
Checking and savings accounts
All of them
10
This measures a stocks volatility compared to overall changes in the stock market?
Price/Earnings Ratio (P/E ratio)
Beta
52-Week High/Low
Earnings per Share (EPS)
11
How much money should you have in your savings account incase of loss of employment?
1-3 years of espenses
1-2 months of expenses
3-6 months of expenses
6-12 months of expenses
12
What is an example of a Tax Deferred Account?
209a
Roth IRA
w-2
401k
13
Investments that represent ownership in a single company are called:
Bonds
Mutual Funds
Money Markets
Stocks
14
Debit cards are beneficial because the consumer:
Earns a small rebate with each purchase
Can carry less cash
May experience bank account fraud or identity theft
Can lose track of balance if not financially careful
15
The primary purpose of a checking account is to:
Help manage money and make paying bills more convenient
Hold all of ones taxes before they are due to the government
Hold money in a safe place until a a lot as been accumulated
Keep track of all one’s shares in the stock market
16
The amount of money of your original loan:
Interest
Mortgage
APR
Principal
17
You invest $4000 and get an 8% APR. How many years will it take for it to double in value?
16 years
12 years
11 Years
9 Years
18
Which financial principle helps you figure out how long it takes your money to double in value?
Simple Interest
Quadratic Equation
Time Value of Money
Rule of 72
19
What is inflation?
The steady rise in the general level of prices
The yield on an investment will deviate from what is expect
The number of times something happens to money
The value of an investment at the end of a specified time
20
A high risk stock that has the potential for high earnings has what classification?
speculative
Cyclical
Value
Blue-chip
21
Consumers benefit from using a checking account because it will:
Keep track of where money is spent
Increase the need to carry cash
Make bill paying difficult
Discourage the habit of saving
22
Banking from home can be performed by using a:
POS (Point of Sale) System
Phone/Internet
ATM Machine
Teller
23
Funds deposited in a federally insured account (FDIC) are protected against loss for up to:
$250,000.00
$50,000.00
$1,000,000.00
$10,000.00
24
What is compound interest?
All of them
The interest earned on the principal only
The interest earned on both interest and principal
The number of days of investing X the original investment
25
A disadvantage of using online banking is that you do not:
Make withdrawals, deposits, and bill payments
Have face to face interaction with Bank employees
Have worldwide access to funds
All of them.
26
What does “pay yourself first” mean?
you should save money left over after paying monthly bills
You should consider savings to be a variable expense
You should consider savings to be a fixed expense
You should pay all fixed expenses before variable expenses
27
Online banking allows the consumer to:
Eliminate the need to reconcile their bank account
Correct fraud or identity theft as soon as it occurs
Have 3-4 days of float time after a check is written
Have 24/7 access to banking transactions
28
What is savings?
The portion of current income not spent on consumption
The purchase of assets to increasing future income
The amount remaining after wants and needs are satisfied
The investment opportunities that yield a high interest rate
29
What type of return allows you to earn interest upon interest?
Simple
Time
Compounding
Principal
30
Funds in a checking account can be accessed by using a/an:
Escrow Service
Credit Card
Payroll Card
Automated teller machine (ATM)
31
You invest $2000 and get a 6% APR. How many years will it take for it to double in value?
18 years
6 Years
24 years
12 years

Fin. Lit. Unit 4 Test Review Flashcards | StudBud