Personal Financial Literacy 2nd Edition By Joan Ryan - Test Bank

Personal Financial Literacy 2nd Edition By Joan Ryan – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

TRUE/FALSE

 

Indicate whether the statement is true or false by writing T for True or F for False on the answer sheet.

 

1. A checking account is a form of demand deposit.

 

2. With an automatic withdrawal, money is added to your account electronically.

 

3. An ATM card can be used to withdraw money from a checking account.

 

4. A restrictive endorsement transfers the right to cash a check to someone else.

 

5. The writer of a check is called the drawer.

 

6. Checks that have been processed are called transposed checks.

 

7. Checking accounts sometimes pay interest and may require a minimum balance in order to avoid a monthly service fee.

 

8. The FDIC insures checking account deposits and savings account balances in all banks.

 

9. A savings account is a demand deposit that may have some restrictions on how quickly or easily the money can be withdrawn.

 

10. A certificate of deposit (CD) is a demand deposit that allows you to withdraw your money at any time without penalty.

 

11. Money market accounts pay the market rate of interest on the money deposited.

 

12. U.S. savings bonds pay a guaranteed rate of interest regardless of how long you keep the bond.

 

13. Money placed in an IRA may be tax-deductible when deposited.

 

14. With a stop payment order, the bank is instructed not to honor a check you issued or lost.

 

15. A stored value card is a smart card, which is a credit card with a fixed rate of interest.

 

16. Relationship banking is one way to reduce your costs of banking services while maximizing your value.

 

17. Inactive accounts do not have balances and are not charged monthly fees.

 

18. Floating a check is a common consumer practice that makes effective use of a checking account.

 

19. The Federal Reserve System regularly examines financial institutions to ensure compliance with consumer protection laws.

 

20. The FDIC insures all types of deposits, including checking, saving, money market, and certificates of deposit.

 

 

MULTIPLE CHOICE

 

Write the letter of the choice that best completes the statement or answers the question on the answer sheet.

 

21. You have invested $500 at 9 percent interest. According to the Rule of 72, how soon will the money double in value?
22. 4 years
23. 6 years
24. 8 years
25. 12 years

 

22. You deposited $1,000 at 5 percent interest compounded annually for 3 years. What is the amount of interest and principal you will have by the end of the 3 years?
23. $1,157.63
24. $1,102.50
25. $52.50
26. $55.13

 

23. A check issued against bank funds is called a
24. cashier’s check
25. money order
26. traveler’s check
27. all of the above

 

24. A checking account
25. is a time deposit account
26. may incur a charge for each check written
27. is a demand deposit account
28. both b and c

 

25. A card that carries an electronic balance is called a(n)
26. ATM card
27. debit card
28. smart card
29. all of the above

 

26. A written order to a bank to pay the stated amount to the person or business named is a(n)
27. deposit
28. check
29. endorsement
30. withdrawal

 

27. Money added to a checking or savings account is called a(n)
28. deposit
29. withdrawal
30. endorsement
31. income

 

28. Money deducted from a checking account and transferred electronically to another party is called a(n)
29. check
30. deposit
31. automatic withdrawal
32. automatic deposit

 

29. The FDIC does not insure
30. checking accounts
31. savings accounts
32. mutual funds
33. certificates of deposit

 

30. Each person who is authorized to write checks on an account must a complete a
31. checkbook register
32. deposit slip
33. bank reconciliation
34. signature card

 

31. A tool used to track checks, withdrawals, deposits, and fees for your checking account is a
32. checkbook register
33. deposit slip
34. bank reconciliation
35. signature card

 

32. Writing For Deposit Only and then signing your name on the back of a check is a(n)
33. blank endorsement
34. restrictive endorsement
35. special endorsement
36. endorsement in full

 

33. The balance on your bank statement dated July 31 is $832.50. Your bank statement shows a monthly service fee of $6.00. Your check register balance on August 2 is $948.85. Your check register shows one deposit in transit dated July 30 for $200.35. You have two outstanding checks: No. 580 for $40.00 and No. 582 for $50.00. What is the adjusted balance for the checkbook register and the bank statement?
34. $1,032.85
35. $942.85
36. $948.85
37. $984.50

 

34. If you deposit $500 for 6 months at an annual interest rate of 7 percent, how much interest will you earn?
35. $350.00
36. $35.00
37. $17.50
38. $7.50

 

 

35. U.S. savings bonds
36. do not pay a guaranteed rate of interest
37. may be purchased at the TreasuryDirect website
38. are discount bonds issued by a state government
39. both b and c

 

36. For how many years do most savings bonds earn interest?
37. 1 year
38. 10 years
39. 20 years
40. 30 years

 

37. Which of the following financial institutions is not likely to be insured by the FDIC?
38. commercial banks
39. online-only banks
40. brokerage firms
41. savings banks

 

38. Which of the following can result in “bouncing” a check?
39. stop payment order
40. nonsufficient funds
41. cashier’s check
42. money order

 

39. When a paper check is transformed into a digital image, it is called a
40. traveler’s check
41. cashier’s check
42. canceled check
43. truncated check

 

40. An advantage of Internet banking includes all of the following except
41. statements cannot be printed, making them more secure
42. account balances can be checked at any time
43. money can be transferred between accounts easily
44. bills can be paid electronically

 

 

 

MATCHING

 

Match each term with the correct definition or description below. Write the letter of the term on the answer sheet.

 

1. bank reconciliation
2. bounced check
3. compound interest
4. endorsement
5. maturity value
6. money order
7. postdated check
8. Rule of 72
9. safe deposit box
10. stop payment

 

41. Interest earned on both principal and previously earned interest

 

42. An instruction to the bank not to honor a check that has been issued or lost

 

43. A bond’s future value as stated on its face

 

44. The process of adjusting the checkbook register and bank statement balances so that they agree

 

45. A check written with a date that will occur in the future

 

46. A secure container located in a bank vault

 

47. A signature, with or without instructions, written on the back of a check

 

48. A formula for computing how long it will take to double money invested at a given rate

 

49. A check that is not honored by a bank and is returned to the payee’s bank due to nonsufficient funds

 

50. A type of check used to pay bills or make payments for which the money is guaranteed

 

ANSWER SHEET                                                   Name ______________________________

 

 

TRUE/FALSE			MULTIPLE CHOICE			MATCHING
1.			21.			41.
2.			22.			42.
3.			23.			43.
4.			24.			44.
5.			25.			45.
6.			26.			46.
7.			27.			47.
8.			28.			48.
9.			29.			49.
10.			30.			50.
11.			31.
12.			32.
13.			33.
14.			34.
15.			35.
16.			36.
17.			37.
18.			38.
19.			39.
20.			40.