WorksheetsChapter 5 Test FL
Total questions: 20
Worksheet time: 10mins
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
What is the primary purpose of a money market account?
To provide unlimited check writing
To earn interest based on market rates with some restrictions
To guarantee fixed interest rates
To avoid all banking fees
What is interest calculated only on money deposited not on prior interest earned?
Compound Interest
Simple Interest
Calculated Interest
None of the above
What is a characteristic of problematic financial businesses like payday loan companies?
Low interest rates
Federal insurance protection
Extremely high interest rates
Long-term payment options
What is interest calculated on both deposits and prior interest earned?
Simple Interest
Interest Calculated
Compound Interest
none of the above
Which account typically requires the highest minimum balance?
Regular checking account
Activity checking account
Interest-earning checking account
Basic savings account
What is the main benefit of creating a CD portfolio?
Higher interest rates
No minimum balance requirements
Staggered maturity dates
Unlimited withdrawals
What is a characteristic of U.S. savings bonds?
High-risk investment
No government guarantee
Must be held for one-year minimum
Can be cashed immediately
What is the primary advantage of smart cards?
They can only be used at ATMs
They contain an embedded microchip
They are only for savings
They don't require a PIN
What is a feature of a regular savings account?
High minimum balance requirement
Fixed interest rate
Low or no minimum balance
Limited number of deposits
Which factor should be considered when selecting a financial institution?
The age of the institution
The number of employees
The services offered and fees charged
The building's architecture
