WISE Review Test #5

Sally won a $200 cash prize at the school science competition. She wants to save the money for her senior trip in three years. It is best for her to save the money during the three years in a

• checking account, because it is easy to withdraw funds.

• drawer at home, because it would be safe.

• savings account, because it would earn interest.

• certificate of deposit (CD), because it generally earns higher interest.

John needs $3,000. He is withdrawing the money today from a $3,000 certificate of deposit (CD) which will reach maturity in six months. It is likely that he will have to

• pay the Internal Revenue Service (IRS) a penalty.

• pay the bank a penalty for early withdrawal.

• pay both the IRS and the bank a penalty.

• wait for the CD to mature.

When a check is returned due to insufficient funds, the check is said to have

• been postdated.

• been voided.

• bounced.

• cleared.

A form of payment that is guaranteed to be as good as cash is a

• personal check.

• bank check.

• credit card charge.

• promissory note.

Deposits in bank savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to

• $50,000.

• $100,000.

• $150,000.

• $250,000.

Which one of the following statements is the most accurate about the use of ATM cards?

• A person can generally get an interest free loan at any bank ATM with no fee.

• A person can always charge a purchase using an ATM card.

• A person can get cash anywhere in the world using an ATM with no fee.

• A person must have a bank account to have an ATM card.

Which of the following financial products is good to have so that a person can cover cash needs today?

• Bonds.

• Individual Retirement Account (IRA).

• Life insurance.

• Regular checking account.

A person writes a check for more money than he has in his checking account. In order for the check to be paid by the bank, he needs to have

• overdraft protection.

• credit insurance.

• a joint account.

• a credit history.

Many companies offer a service to electronically deposit an employee’s net pay into his designated bank account. This service is known as

• barter.

• amortization.

• automatic savings.

• direct deposit.

When a person cashes a $300 check and only receives $285, she most likely went to a/an

• investment bank.

• check cashing store.

• savings bank.

• credit union.