Exam 2 (weeks 4-6)

Question 1

What are the goals of effective cash management? Select all that apply.

Convenience
Minimize cost
Personalized assistance when needed
Secure
Interest

Answer 1

All of the above

Question 2

The general rule of thumb is for an emergency fun to have_________ months worth of family expenses

One
1 to 3
3 to 6
12

Answer 2

3 to 6

Question 3

Which of the following would NOT be considered a cash management option?

Cash
Checking/savings account
Stocks
CDs (certificates of deposit)

Answer 3

Stocks

Question 4

When comparing cash management options, the higher the ____________ the lower, the _________

Deposit; fees
Liquidy; interest rate
Security; convenience
Cost; service

Answer 4

Liquidy; interest rate

Question 5

Match the facts about cash management account

Cash on hand
Checking accounts
Certificates of deposit
Money, market account

Most basic cash management option
Most common cash management option
The longer the deposit term, the higher, the interest rate
Generally require higher minimum balances

Answer 5

Cash on hand = most basic cash management option
Checking accounts = most common cash management option
Certificates of deposit = the longer the deposit term, the higher, the interest rate
Money market account = generally require higher minimum balance

Question 6

Match the facts about financial institutions

Commercial banks
Online banks
Credit unions

Typically offer the widest variety of support and services
Typically offer higher interest rates on deposits in charge less for loans
Owned by members and are not for profit

Answer 6

Commercial banks = typically offer the widest variety of support and services
Online banks = typically offer higher interest rates on deposits and charge less for loans
Credit unions = owned by members and are not for profit