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Exam 4: Managing Your Cash and Savings

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Question 21

True/False

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There is a penalty for early withdrawal of funds from CDs purchased from brokerage firms.

A) True
B) False

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Question 22

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A certified check is a personal check that the bank guarantees the funds are available.

A) True
B) False

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Question 23

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Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Liquid assets would include your savings account and your [money market deposit account | stock mutual fund].

The key to a successful savings program is to save regularly.

Asset management accounts are protected by the Federal Deposit Insurance Corporation.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Your bank does not levy a service charge on your checking account as long as a $1,000 minimum balance is maintained.Your bank [can | cannot] advertise this as free checking.

FDIC covers stocks,bonds,and mutual funds purchased at banks.

Saving accounts are sometimes referred to as demand deposits.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Credit unions are generally [small | large] institutions when compared with commercial banks and savings and loans.

EFTS allow you to make payments that occur on a regular basis.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -An asset management account is likely to require a minimum investment of at least [$1,000 | $5,000].

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Interest earned on your [US EE savings bonds | municipal bond holdings] would be free of federal income taxes.

Janice Sanders plans on saving $12,000 for 3 years until she returns to college for her master's degree in personal financial planning.She would like to receive a fixed rate of return over that period.Which of the following would you recommend?

Which of the following accounts has special tax advantages under certain conditions when used to fund qualified college education expenses?

From the bank's perspective,ATM transactions are more costly than on-line banking transactions.

Your savings will grow faster with monthly interest compounding than with quarterly interest compounding.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Your bank probably [will | will not] levy a transaction fee if you use a "foreign" ATM to make a withdrawal.

Internet-only banks typically pay lower interest rates on savings than traditional banks.

Savings banks are mainly found in the northeastern U.S.

Which of the following would be an appropriate savings vehicle if you expected interest rates to fall over the next few months?