Chapter 5 Test FL

What is the main difference between a debit card and a credit card?

• A debit card has a higher credit limit

• A credit card earns more interest

• A debit card uses your funds while a credit card is borrowed money

• A debit card can only be used at ATMs

Which financial service provider is owned by its members and typically offers lower fees?

• Commercial banks

• Credit unions

• Investment companies

• Pawnshops

What is the purpose of a bank reconciliation?

• To open a new checking account

• To compare the bank statement with the checkbook balance

• To deposit money into savings

• To write checks for bills

What is a characteristic of a certificate of deposit (CD)?

• Unlimited withdrawals at any time

• No minimum deposit required

• Requires funds to remain deposited for a specific time period

• Daily interest rate changes

Which type of endorsement is most secure when depositing a check?

• Blank endorsement

• Special endorsement

• Restrictive endorsement

• No endorsement

What is the main advantage of online and mobile banking?

• Higher interest rates

• Convenience and 24/7 access

• Free checking accounts

• Unlimited withdrawals

What is an asset management account?

• A checking account only

• A savings account only

• A complete financial services program for one fee

• A trust fund

Which institution traditionally specialized in mortgage loans?

• Credit unions

• Savings and loan associations

• Investment companies

• Brokerage firms

What is the Truth in Savings Act requirement?

• All banks must offer the same interest rates

• Banks must disclose fees, interest rates, and APY

• Savings accounts must be federally insured

• Minimum balances are prohibited

What affects the yield of savings through compounding?

• The location of the bank

• The type of account only

• The frequency of compounding periods

• The account holder's credit score