Unit 2: Banking

When it comes to personal savings, what does the acronym PYF stand for?

• Prepare Your Future

• Prepay Your Finances

• Pay Yourself First

• Pay Your Friends

A saver who wants her savings insured by the FDIC (Federal Deposit Insurance Corporation) wants to use this savings option.

• Savings account

• Mutual funds

• Bonds

• Stocks

This type of investment is essentially an IOU with a set rate of return. The issuer promises to pay the buyer a certain sum of money at the end of a stated period plus interest payments at specific intervals.

• Money market account

• Stocks

• Bonds

• Certificate of deposit

Stocks are insured against loss by most banks and credit unions.

• True

• False

A long-term investment usually means an investment period of one to three months.

• True

• False

1.     When lenders lend money to borrowers, they charge an additional fee for the use of

their money. This fee is called:

• Debit

• Credit

• Stock

• Interest

Interest is the fee received for the use of money.

• True

• False

1.     Identify the incorrect statement.

• A debit card allows for an immediate electronic transfer of money from a cardholder's savings or checking account.

• A debit card is handy in an emergency when you don't have the money to spend.

• A debit card is a pay-now payment type with no grace period for payments.

• A debit card is essentially a paper check but doesn't require the processing time a check does.

This type of investment is a collection of stocks or bonds of various companies

• Mutual Funds

• Stocks

• Bonds

• Certificate of Deposit

Savings Accounts provide higher interest rates than a certificate of deposit.

• True

• False