WorksheetsBanking and Finance Quiz
Total questions: 25
Worksheet time: 3600secs
FDIC-Federal Deposit Insurance Corporation. The federal government will insure ______ of your savings in deposits with bank accounts and credit unions should the bank fail.
What is a financial institution?
A financial institution is a company that provides financial and monetary transactions
What is fractional reserve banking?
What is a bank deposit?
What is a bank run?
A bank run is when a large number of customers withdraw their deposits from a bank due to fear of a bank failure
What does NCUA stand for?
National Credit Union Administration
National Consumer Union Association
National Credit Union Association
National Consumer Union Administration
What is the function of the National Credit Union Administration?
A sum of money that is lent to an individual/group with the expectation of repayment with interest-
What is interest?
Principle refers to this in banking
What is simple interest?
What is compound interest?
What is the formula for calculating Compound Interest?
P(1 + r)^t
P(1 + r/n)^(nt)
P + (P*r*t)
P(1 - r)^t
Which of the following best explains why banks are essential to a healthy economy?
Banks provide loans to businesses and consumers.
Banks only serve high-net-worth individuals.
Banks print new money for the economy.
Banks collect taxes on behalf of the government.
What are some of the advantages of saving money with a bank?
Higher interest rates compared to keeping money at home
Easy access to funds
Safe and secure
All of the above
Which of the following statements accurately describes the difference between a bank and a credit union?
Bank is for-profit, anyone can be a customer, higher fees and interest rates on loans, diverse array of product offerings, product pushing and cookie cutter services, deposit insurance provided by FDIC. Credit unions are non-profit, you must qualify for a membership, lower fees and better interest rates, limited product offerings, more personalized customer service, deposit insurance provided by NCUA.
Bank and credit unions both are for-profit institutions, offer the same fees, interest rates, and product offerings, and both require membership qualifications.
Credit unions are for-profit, anyone can be a customer, higher fees and interest rates on loans, diverse array of product offerings, product pushing and cookie cutter services, deposit insurance provided by FDIC. Banks are non-profit, you must qualify for a membership, lower fees and better interest rates, limited product offerings, more personalized customer service, deposit insurance provided by NCUA.
Both banks and credit unions do not offer deposit insurance, are for-profit, and have high fees and interest rates on loans.
How have programs such as FDIC and NCUA improved the banking system?
By insuring deposits, thus increasing public confidence in the banking system
By directly providing loans to individuals
By reducing the interest rates on savings accounts
By increasing the fees for banking services
Why do financial institutions charge interest on loans?
To cover the cost of operations
To earn profit
To mitigate the risk of default
All of the above
What is the Rule of 72?
A method to estimate the time required to double an investment.
A rule to calculate interest rates.
A financial principle to minimize taxes.
A guideline for retirement savings.
Explain why a dollar today is worth more than a dollar tomorrow.
Inflation increases prices over time, reducing the purchasing power of money.
The interest rate on savings accounts is very high.
Money loses its value when it is not used.
A dollar can only be spent once, regardless of when it is spent.
If you were getting a loan would you prefer simple or compound interest? Defend your choice.
Simple interest, because the amount of interest is fixed and does not increase over time.
Compound interest, because it allows the interest to grow on top of the interest over time.
Neither, as I would not take a loan.
Depends on the terms of the loan and financial situation.
What types of actions can you perform with online banking?
Transferring money between accounts
Paying bills online
Applying for a loan
Physical currency exchange
What actions can you take to avoid identity theft?
Regularly update your passwords
Share your passwords with friends for safekeeping
Post personal information on social media
Use the same password for all accounts
Why should you generally avoid pawnshops and check cashing centers?
They offer financial advice.
They provide low-interest loans.
They charge high interest rates and fees.
They have convenient operating hours.
What should you look for when comparison shopping for different banks?
Interest rates and fees
Location and ATM availability
Customer service and reviews
All of the above
