FP1 Final Exam Rev. Part 2

What type of service might a bank provide a business that needs the flexibility to borrow different amounts of money at different times without having to reapply?

• mortgage

• line of credit

• installment loan

• certificate of deposit

The direction of a client's cash and securities by a financial services company, usually an investment bank, or an individual is known as:

What type of service does a bank provide to a business that needs to borrow funds for a short period of time?

• mortgage

• line of credit

• installment loan

• certificate of deposit

The electronic clearance and settlement system used for financial transactions by U.S. commercial banks and other institutions is called the:

• Federal Reserve System (FRS)

• automated clearing house (ACH)

• automated teller machine (ATM)

• Federal Deposit Insurance Corporation (FDIC)

Which is a factor that determines how much investment risk a person can handle?

Which of the following is considered when determining a person's credit score?

• A. payment history

• B. income

• C. social status

• D. banking institution

Which is a disadvantage of investing in a savings account?

• The account's potential for loss is high.

• The rate of return fails to keep up with inflation.

• One must pay a penalty for withdrawing.

Which is an example of a lending investment?

• bonds

• stocks

• antiques

• real estate

Ownership investments are ideal for investors who are:

• risk-averse.

• seeking high returns.

• looking for stability.

• interested in short-term gains.

Who is most likely to be risk-tolerant?

• a retiree

• risk-tolerant.

• close to retirement.

• just beginning to invest.