Chapter 5 terms

Question 1

monetary assets

Answer 1

cash and low risk near cash items that can be converted into cash

Question 2

liquidity

Answer 2

ease with which an asset can be converted into cash

Question 3

depository institutions

Answer 3

organizations licensed to take deposits and make loans

Question 4

credit unions

Answer 4

member owned not for profit federally insured financial institutions that that provide checking, savings, and loan services to members.

Question 5

national credit union association is equivalent to…

Answer 5

FDIC for credit union

Question 6

checking account

Answer 6

allows you to write checks against amount you have on deposit

Question 7

APY

Answer 7

annual % yield

Question 8

interest earning checking account

Answer 8

any account on which you can write checks that pay interest

Question 9

minimum balance account

Answer 9

checking account that requires customers to keep a certain min amount for a specified time period to avoid fees

Question 10

stop payment order

Answer 10

notifying you bank not to honor a check when its presented for payment

Question 11

savings account

Answer 11

account that provides an accessible source of emergency cash and a temporary holding place for extra funds that will earn interest

Question 12

time deposits

Answer 12

savings account that financial institutions expect to remain on deposit for an extended period