Chapter 4 and 5 (Banking)

A safety deposit box is a safe way to store valuables in a banks vault.

• True

• False

The following statement is true of Online banks?

• Their low overhead costs allow them to pay higher interest rates on savings accounts.

• Most of their services must be paid for with service charges.

• Most interest banks also staff physical banks and branch offices.

• They have high operating expenses because they must maintain enough staff to be available 24 hours a day.

What banking service ensures a financial institution will honor a check even if it exceeds the account balance?

• stop payment order

• money order

• check certification

• overdraft protection

An example of a restrictive endorsement

• Scott Schumacher

• Mr. Scott Schumacher

• Pay to the order of Mike Wolf, Scott Schumacher

• For Deposit Only, Scott Schumacher

FDIC insures bank deposits in commercial banks for a maximum of?

• $150,000

• $250,000

• $100,000

• $300,000

On money loaned banks charge

• more interest than what they pay on amounts in savings accounts

• less interest than what they pay on amounts in savings accounts

• same interest than what they pay on amounts in savings accounts

What is a disadvantage of a Certificate of Deposit(CD)?

• Insured by FDIC

• Require depositor to pay a fee to open account

• Require depositor to leave money in the bank for a specified period of time

• Interest rate is taxed at a higher rate.

Federal Reserve (The Fed) controls which of the following?

• Fiscal Policy

• Tax Collection

• Government Spending

• Monetary Policy

Which account is least liquid

• Savings Account

• Certificate of Deposit (CD)

• Money Market Account

• Checking Account

The Fed can do all the following EXCEPT:

• Collect Taxes

• Conduct open market operations

• Adjust the discount rate

• Adjust the reserve requirement