Chapter 4 managing your cash and savings

lOMoARcPSD|10289698

Chapter 4 Managing Your Cash and Savings
Principles of Finance (Trường Đại học Ngoại thương)

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lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
1. One could expect to earn a higher rate of interest on a certificate of deposit than on a checking account.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-1 - LO: 4-1
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
2. A savings account may be a useful tool in managing everyday household transactions.

a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
3. Saving accounts are sometimes referred to as demand deposits.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:

STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
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Page 1


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
4. Specialization within the financial institutions industry continues to increase.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:

United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
5. The rate of return on liquid assets is relatively high compared to other types of investments.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
6. NOW accounts are appropriate for people who need to keep substantial amounts of money in a checking account and
use it for numerous transactions each month.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1

DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
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Page 2


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
and Interest Rates
KEYWORDS: Bloom's: Applying
7. Credit unions typically pay higher rates of return on savings than banks and savings and loan associations.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2

BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
8. There is a penalty for early withdrawal of funds from CDs purchased from brokerage firms.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
9. Certificates of deposit can be purchased only at banks, savings and loan associations, and credit unions.
a. True
b. Fals
e

ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-5 - LO: 4-5
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
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Page 3


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
10. One can avoid early withdrawal penalties on CDs by purchasing them through brokerage firms.
a. True
b. Fals
e
ANSWER:
True

POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-5 - LO: 4-5
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
11. Money market mutual funds are insured up to $250,000 by the FDIC if purchased at an insured bank.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering

12. Money market deposit accounts are insured by the FDIC if purchased at an insured bank.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
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Page 4


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
13. FDIC covers stocks, bonds, and mutual funds purchased at banks.
a. True

b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
14. Asset management accounts are protected by the Federal Deposit Insurance Corporation.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest

ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
15. There are no limitations on check writing for both MMDAs and MMMFs.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
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Page 5


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets

and Interest Rates
KEYWORDS: Bloom's: Remembering
16. Asset management accounts (AMAs) combine many cash management services into one account.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
17. S&Ls are the most popular segment of the financial institutions industry.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2

BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
18. Another term for the interest paid by credit unions on deposits is dividends.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
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Page 6


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills

ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
19. The main business of an S&L is to provide home mortgage and home improvement loans.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
20. Savings and loan associations (S&Ls) channel the savings of depositors primarily into automotive loans.
a. True
b. Fals
e
ANSWER:
False

POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
21. Savings and loan associations usually offer non-interest bearing checking accounts.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
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Page 7


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
22. The annual percentage yield (APY) formula considers compounding when determining an interest rate.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-5 - LO: 4-5
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
23. Savings banks are mainly found in the northeastern United States.
a. True

b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
24. Credit unions are mainly found in the northeastern United States.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
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Page 8

lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
25. Credit union members are expected to have some common bond.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets

and Interest Rates
KEYWORDS: Bloom's: Remembering
26. From the bank's perspective, ATM transactions are more costly than online banking transactions.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
27. EFTS allow you to make payments that occur on a regular basis.
a. True
b. Fals
e
ANSWER:
True
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Page 9


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
28. Convenience and improved record keeping are two advantages cited for online bill payment.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills

ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
29. Money market mutual funds invest in long-term treasury securities and other types of bonds.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
30. A regular savings account is a time deposit.
a. True
b. Fals
e
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Page 10


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
31. As of 2014, the FDIC insures depositor's funds up to $250,000 at member banks.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1

DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
32. You should insure valuables, even if they are kept in a safe-deposit box.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
33. Financial institutions expect demand deposits to remain on deposit for a longer period of time than time deposits.
a. True

b. Fals
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lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Creating
34. A money market mutual fund is one way to participate indirectly in the purchase of money market securities.
a. True
b. Fals
e

ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
35. If one wanted to make monthly deposits to accumulate funds for future expenditures, a money market account would
be an appropriate savings vehicle.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:

United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
36. Asset management accounts (AMAs) are offered by brokerage firms and are protected by the Securities Investor
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Page 12


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
Protection Corporation.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets

and Interest Rates
KEYWORDS: Bloom's: Remembering
37. Most credit unions provide their members with deposit insurance.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
38. For married depositors, it is possible to increase the $250,000 of deposit insurance to up to $1,500,000 by opening a
variety of accounts in different depositor names at the same institution.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate

LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
Cengage Learning Testing, Powered by Cognero

Downloaded by Thanh H?ng ()

Page 13


lOMoARcPSD|10289698

Chapter 4—Managing Your Cash and Savings
KEYWORDS: Bloom's: Remembering
39. Mark Helig has a checking account in his name and a joint savings account with his wife at the same bank. The
maximum amount of deposit insurance the Heligs have is $250,000.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2

BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Applying
40. If Suzie has $2,000 in checking, $50,000 in a money market deposit account, and $75,000 in certificates of deposit (all
individual accounts) at her local bank, her accounts would be completely insured through FDIC.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Applying
41. If Lois has $2,000 in checking, $50,000 in a money market mutual fund, and $75,000 in certificates of deposit (all
individual accounts) at her local bank, her accounts would be insured through FDIC for $77,000.
a. True

b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-2 - LO: 4-2
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
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Chapter 4—Managing Your Cash and Savings
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Applying
42. Debit and ATM card transactions are linked to your checking account.
a. True
b. Fals
e

ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
43. Although there are no legal minimum balances for a NOW account, many institutions impose their own requirement,
often between $500 and $1,000 before they pay any interest.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:

United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
44. ATM transactions require the use of a PIN.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
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Chapter 4—Managing Your Cash and Savings
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates

KEYWORDS: Bloom's: Remembering
45. Internet-only banks typically pay lower interest rates on savings than traditional banks.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-3 - LO: 4-3
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
46. Stop-payment services are easier with electronic funds transfers than with traditional check payments.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:

NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
47. Treasury bills are sold at their face value.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Easy
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Chapter 4—Managing Your Cash and Savings
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:

STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
48. Treasury bills are sold at a discount of their maturity value.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
49. The minimum denomination for Treasury bills is now $1,000.
a. True
b. Fals
e
ANSWER:
False
POINTS:

1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
50. If your bank states that it compounds monthly, the effective interest rate (APY) will be greater than the nominal
interest rate.
a. True
b. Fals
e
ANSWER:
True
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Chapter 4—Managing Your Cash and Savings
POINTS:
1

DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-5 - LO: 4-5
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
51. Your savings will grow faster with monthly interest compounding than with quarterly interest compounding.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-5 - LO: 4-5
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
52. Compound interest means that a savings account earns interest on the interest previously earned.
a. True

b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-5 - LO: 4-5
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
53. A certified check is a personal check for which the bank guarantees the funds are available.
a. True
b. Fals
e
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Chapter 4—Managing Your Cash and Savings

ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
54. A bank cannot advertise as "free" a checking account that requires a minimum balance, even though depositors who
maintain the minimum balance pay no service fees.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:

United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
55. Joint checking accounts typically imply the right of survivorship if one party should die.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
56. You can stop payment when you purchase an item with your debit card.
a. True
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Chapter 4—Managing Your Cash and Savings
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
57. The rate of return on a Series EE savings bond will be constant over the life of the bond.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:

NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
58. The rate of return on a Series EE savings bond changes semiannually.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
59. Series EE Savings bonds are also called Patriot Bonds.
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Chapter 4—Managing Your Cash and Savings
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Easy
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
60. Series HH bonds are issued at their full face value and pay interest semiannually at the current fixed rate.
a. True
b. Fals
e
ANSWER:
True
POINTS:

1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Remembering
61. You should invest in long-term CDs when you expect interest rates to fall.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
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Chapter 4—Managing Your Cash and Savings
62. The nominal rate of interest will be lower than the effective rate of interest when an account compounds monthly.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Challenging
LEARNING O PFIN.BILL.17.4-5 - LO: 4-5
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Analyzing
63. You put $1,000 into a 12-month certificate of deposit. After seven months, you really need the money. The bank will
let you have it before 12 months, but you will pay a penalty.
a. True

b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-6 - LO: 4-6
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
64. A major reason for overdrafts is the inability of a check writer to keep an accurate checkbook ledger.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest

ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
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Chapter 4—Managing Your Cash and Savings
KEYWORDS: Bloom's: Analyzing
65. If your checkbook is lost or stolen, there is no need to stop payment on the checks.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets

and Interest Rates
KEYWORDS: Bloom's: Analyzing
66. A cashier's check is written on the bank's account rather than on a customer's account.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4
BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
and Interest Rates
KEYWORDS: Bloom's: Understanding
67. A certified check is written on the bank's account rather than on a customer's account.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY: Moderate
LEARNING O PFIN.BILL.17.4-4 - LO: 4-4

BJECTIVES:
NATIONAL ST United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
ANDARDS:
STATE STAND United States - AK - DISC: Banking and Interest
ARDS:
United States - KS - DISC: Financial Markets and Inte - DISC: Financial Markets
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Chapter 4—Managing Your Cash and Savings
and Interest Rates
KEYWORDS: Bloom's: Understanding
68. Low interest rates that have persisted since the financial crisis of 2008-09 have been a net benefit to retirees.
a. True
b. Fals
e
ANSWER:
False
POINTS:
1
DIFFICULTY:
Moderate
LEARNING OBJECT PFIN.BILL.17.4-5 - LO: 4-5
IVES:

NATIONAL STANDA United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
RDS:
STATE STANDARDS United States - KS - DISC: Financial Markets and Inte - DISC: Financial
:
Markets and Interest Rates
KEYWORDS:
Bloom's: Analyzing
69. Lower borrowing costs encourage the substitution of debt for equity in corporate capital structures, which increases
financial risk.
a. True
b. Fals
e
ANSWER:
True
POINTS:
1
DIFFICULTY:
Challenging
LEARNING OBJECT PFIN.BILL.17.4-1 - LO: 4-1
IVES:
NATIONAL STANDA United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
RDS:
STATE STANDARDS United States - KS - DISC: Financial Markets and Inte - DISC: Financial
:
Markets and Interest Rates
KEYWORDS:
Bloom's: Creating
70. Low interest rates have increased the supply of credit.
a. True
b. Fals

e
ANSWER:
False
POINTS:
1
DIFFICULTY:
Challenging
LEARNING OBJECT PFIN.BILL.17.4-1 - LO: 4-1
IVES:
NATIONAL STANDA United States - BUSPROG: Analytic skills - BUSPROG: Analytical skills
RDS:
STATE STANDARDS United States - KS - DISC: Financial Markets and Inte - DISC: Financial
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Page 24