Unit 5 Test; Personal Finance

Credit cards can be a good way for a young person to establish credit.

• True

• False

The bank will only cash a check for the amount that is spelled out.

• True

• False

Who ever a check is written out to can demand the amount written as if it were cash.

• True

• False

A Debit card works and acts just like a Credit card.

• True

• False

Most credit card companies will not charge you a late fee if you are only one day late.

• True

• False

What is the disadvantage of a Certificated Deposit?

• the interest rate compared to savings accounts

• the length of time you are without the money

• the mature date

• all of these

An advantage of a virtual bank is _____________ a disadvantage is _____________.

• no branches; online access

• online access; lower interest rate than a normal bank

• a higher interest rate than normal banks; online access

• a higher interest rate than normal banks; no branches

The good thing about a savings account is __________ the bad thing is ______________.

• the interest rate is low; access

• access; the interest is low

• the interest rate is low; the time invested

• the time invested; access

Compound interest is

• hard to calculate because it involves fractions

• is calculated and payed 2 or more times a year

• is calculated and payed once a year

• is 4 times the amount of the principal

In general the safer the investment

• the safest return

• the higher the risk

• the lower the return

• the higher the return