Chapter 10-Saving For The Future

Question 0

The day on which a certificate must be renewed or cashed in

Answer 0

Maturity date

Question 1

Money that is paid for the use of money

Answer 1

Interest

Question 3

A regular account at a credit union

Answer 3

Share account

Question 4

The amount of money placed in savings

Answer 4

Principle

Question 6

When CD is cashed before its maturity date, the depositor must pay

Answer 6

Early withdrawal penalty

Question 7

Money set aside for a specific length of time at a specific rate

Answer 7

Certificate of deposit

Question 8

The total value of all goods and services produced in 1 year

Answer 8

Gross domestic product

Question 9

The capability of financial resources being readily converted to cash

Answer 9

Liquidity

Question 12

What you have left over to spend as you wish (after your bills are paid each month)

Answer 12

Discretionary income

Question 13

Involves an employer or financial institution placing your checks into a bank account

Answer 13

Direct deposit

Question 14

Having money withheld from your paycheck and sent directly to your savings plan

Answer 14

Automatic payroll deduction

Question 15

Deposits kept in credit unions are insured by

Answer 15

NCUA

Question 16

Federal insurance for depositors in commercial banks and savings and loans by

Answer 16

FDIC

Question 17

The greater the…….you are willing to take, the higher the rate of interest you will receive

Answer 17

Risk

Question 18

When a CD is cashed before its maturity date, the depositor must pay a

Answer 18

Maturity date penalty

Question 19

Emergencies, vacations, social events, and major purchases are examples of short-term needs

Answer 19

True

Question 20

The money you can save will depend on discretionary income, the importance of savings, needs and wants, and your willpower to forego present spending

Answer 20

True

Question 21

When you deposit money in a savings account, the financial institution pays you dividends for the use of that money

Answer 21

False

Question 22

Rate of return and annual percentage yield are the same

Answer 22

True

Question 23

Commercial banks are only state chartered

Answer 23

False

Question 24

When choosing a financial institution in which to place your savings, you should consider safety, liquidity, connivence, and purpose

Answer 24

True

Question 25

Deposits in savings and loan associations and commercial banks are insured by the FDIC

Answer 25

True

Question 26

If a depositor withdraws part or all of a certificate of deposit before its maturity date, there will be an early withdrawal penalty

Answer 26

True

Question 27

Financial institutions can offer interest compounded daily because of computers that make rapid communications possible

Answer 27

True

Question 28

Some ways to make saving easier include direct deposit and automatic deductions

Answer 28

True

Question 29

What is not an example of a long term savings goal

Answer 29

Automobile purchase

Question 30

What is most liquid

Answer 30

Regular savings

Question 31

A type of savings plan whereby you set aside most of your money at a financial institution for a set period

Answer 31

Certificate of deposit

Question 32

What is not a benefit of direct deposit

Answer 32

Your money earns more interest than in any other type of savings plan

Question 33

What do banks usually offer

Answer 33

ATMs, numerous locations, drive-up windows

Question 34

The FDIC insures a depositor's money up to

Answer 34

$250,000

Question 35

What pays highest total interest when depositors are withdrawn at irregular times

Answer 35

Compound daily

Question 36

Parts of a GDP

Answer 36

Consumer spending, Business Investment, Government spending, Net foreign trade

Question 37

Goals in economy

Answer 37

Economic growth, low unemployment, low inflation

Question 38

The actual interest rate an account pays per year, with compounding included

Answer 38

Annual percentage yield

Question 42

Interest drawn on the sum of the original principal plus interest

Answer 42

Compound interest

Question 43

A type of savings plan available through broker or investment firms, which is not covered by the FDIC

Answer 43

Money market account

Question 44

Investors buy and sell securities through..., who work for a brokerage firm

Answer 44

Stockbroker