MDL Semester 1 Review

Front

All of the following would reduce Maria’s checking account balance, EXCEPT… Writing a check to pay her rent, Using her debit card to buy groceries, Setting up an automatic payment for her utility bill

Back

Receiving a direct deposit from her employer

Front

All of the following are common benefits of mobile banking, EXCEPT… Transfer money without visiting a bank branch, Deposit checks using your phone’s camera, Check your account balance at any time

Back

Avoid all banking fees, like overdraft fees

Front

What is the benefit of compounding in savings accounts?

Back

It yields larger returns than simple interest

Front

How is putting money in a savings account different from investing in the stock market?

Back

Saving is best for short-term needs; investing is best for long-term goals

Front

Which of the following best describes a credit report? A detailed record of your borrowing and repayment history, A summary of your monthly income and expenses, A list of all the bank accounts you have opened, A document that shows your current credit and balances only

Back

A detailed record of your borrowing and repayment history

Front

Compared to alternative banking services (e.g. check cashing), traditional banks…

Back

Offer more consumer protections

Front

Sayeed has an extra $100 to pay down his debts. To minimize his total interest, which debt should he pay off first? Options: His car loan: $2,400 at a 7.2% interest rate, His credit card: $2,500 at a 19.5% interest rate, His federal student loans: $4,300 at a 6.53% interest rate, His personal loan: $500 at a 3% interest rate

Back

His credit card: $2,500 at a 19.5% interest rate

Front

Which investment automatically adjusts your asset allocation over time? Options: Target Date Fund (TDF), Index Fund, Individual Stock, 401(k)

Back

Target Date Fund (TDF)

Front

Which of the following is TRUE about a secured credit card? Options: Secured credit cards have a spending limit equal to the deposit amount, Secured credit cards do NOT build your credit history, Secured credit cards are higher risk for a bank than other credit cards, Secured credit cards usually have a higher credit limit than other cards

Back

Secured credit cards have a spending limit equal to the deposit amount

Front

Which of the following correctly pairs the term with its definition?
Principal: A part of the item's cost that is paid at the time of purchase
Interest Rate: The rate charged for borrowing money
Down payment: The original amount of money borrowed
Cosigner: A valuable item that the lender can take as a form of payment

Back

Interest Rate: The rate charged for borrowing money