Week 3 Quiz Flashcards
T/F: Cash is the only kind of liquid asset.
False
T/F: Cash management helps in personal financial planning.
True
T/F: Debit cards are a form of an electronic funds transfer system (EFTS).
True
T/F: The minimum amount that you must keep in an account every day is an important criterion when comparing the features and requirements of different checking accounts offered by a bank.
True
T/F: Interest earned for a period should be added to the ending balance shown in your checkbook while reconciling your account.
True
T/F: Compound interest means that a savings account earns interest on the interest previously earned.
True
Cash and near-cash resources are known as:
Liquid assets
Funds in commercial banks are protected by the:
Federal Deposit Insurance Corporation (FDIC).
Imani is a college student who withdraws cash at least five times a week to meet her everyday expenses. Imani should have a checking account with:
no automated teller machine (ATM) access fees.
If you write a check for an amount greater than your account balance, the result will be a(n):
overdraft
Joni invests $800 at 4%, compounded quarterly. Total interest earned in 1 year will be:
$32.48.
T/F: Using credit is the ideal way to meet basic living expenses.
False
T/F: Paying a loan on schedule is one way to build a strong credit history.
True
T/F: The purpose of a credit investigation is to evaluate the kind of risk that you pose to the lender.
True
T/F: You should review your credit bureau file every year.
True
T/F: You should not give your credit card account number over the phone to people or organizations who call you.
True
Which of the following is the best way to build a strong credit history?
Consistently make payments on time
Which of the following is the correct formula for calculating the debt safety ratio?
Total Monthly Consumer Credit Payments ÷ Monthly Take-Home Pay
Any credit card purchase will effectively be an interest-free loan if you have a zero balance when the grace period begins and you:
pay off the entire balance on or before the due date.
Which of the following cards provides direct access to your checking account?
Bank debit cards
When canceling a credit card, you should cut up the card and:
inform the issuer in writing that you are canceling your account.
Which of the following is an example of phishing?
Pretending to be an employee of a financial institution
