Standard 3: Financial Service Providers

A financial institution that provides compensation in case of a disaster or accident is called a(n)

• bank.

• credit union.

• insurance company.

• investment bank.

A stock broker is BEST described as a

• company that provides advice on insurance.

• business that provides financial services to others.

• person who makes loans to people who need to borrow money.

• person who assists others in buying investments such as stocks and bonds.

Which of the following options would provide the GREATEST protection for your coin collection?

• Buying an insurance policy

• Burying it in the backyard

• Buying a lock box to keep in the closet at home

• Getting a safety deposit box at your bank

The primary difference between a bank and a credit union is

• there is no primary difference between a bank and a credit union.

• a credit union provides financial services for individuals and a bank provides financial services for businesses.

• a bank is a for-profit financial service provider and a credit union is a non-profit financial service provider.

• a credit union provides services to anyone who wants to use it and a bank requires you to have a membership.

If your parents are saving for your college education, they have probably

• invested in real estate.

• purchased stock in your name.

• opened a savings account for you.

• purchased a stamp collection as an investment.

Suppose it is late on Saturday night and you need to get cash. Which of the following is your BEST option?

• Use an ATM to get a cash advance on your credit card.

• Use an ATM to get cash from your checking account.

• Go to the store to make a purchase and return it for cash.

• Call a friend in another state and ask him to wire transfer money to you.

The purpose of overdraft protection is to

• allow you to write checks for insufficient funds without getting caught.

• allow you to write checks when you do not have enough money in the bank.

• borrow money from the bank when you need more money.

• allow you to move money from your savings account when your checking account is too low to cover your payments.

A company than specializes in home loans is called a(n)

• mortgage company.

• insurance company.

• bank.

• credit union.

The BEST way to build a relationship with a banker is to

• open a checking account at her bank.

• go by the bank each day and say hello.

• buy stocks and bonds from him.

• get a cash advance on your credit card.

Financial service providers charge fees to

• take advantage of their customers.

• offset the cost of low interest rates.

• make increased profits for their stockholders.

• cover the cost of providing services to their customers.