Week 3 Quiz

Question 1

T/F: Cash is the only kind of liquid asset.

Answer 1

False

Question 2

T/F: Cash management helps in personal financial planning.

Answer 2

True

Question 3

T/F: Debit cards are a form of an electronic funds transfer system (EFTS).

Answer 3

True

Question 4

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.

Answer 4

True

Question 5

T/F: Interest earned for a period should be added to the ending balance shown in your checkbook while reconciling your account.

Answer 5

True

Question 6

T/F: Compound interest means that a savings account earns interest on the interest previously earned.

Answer 6

True

Question 7

Cash and near-cash resources are known as:

Answer 7

Liquid assets

Question 8

Funds in commercial banks are protected by the:

Answer 8

Federal Deposit Insurance Corporation (FDIC).

Question 9

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:

Answer 9

no automated teller machine (ATM) access fees.

Question 10

If you write a check for an amount greater than your account balance, the result will be a(n):

Answer 10

overdraft

Question 11

Joni invests $800 at 4%, compounded quarterly. Total interest earned in 1 year will be:

Answer 11

$32.48.

Question 12

T/F: Using credit is the ideal way to meet basic living expenses.

Answer 12

False

Question 13

T/F: Paying a loan on schedule is one way to build a strong credit history.

Answer 13

True

Question 14

T/F: The purpose of a credit investigation is to evaluate the kind of risk that you pose to the lender.

Answer 14

True

Question 15

T/F: You should review your credit bureau file every year.

Answer 15

True

Question 16

T/F: You should not give your credit card account number over the phone to people or organizations who call you.

Answer 16

True

Question 17

Which of the following is the best way to build a strong credit history?

Answer 17

Consistently make payments on time

Question 18

Which of the following is the correct formula for calculating the debt safety ratio?

Answer 18

Total Monthly Consumer Credit Payments ÷ Monthly Take-Home Pay

Question 19

Any credit card purchase will effectively be an interest-free loan if you have a zero balance when the grace period begins and you:

Answer 19

pay off the entire balance on or before the due date.

Question 20

Which of the following cards provides direct access to your checking account?

Answer 20

Bank debit cards

Question 21

When canceling a credit card, you should cut up the card and:

Answer 21

inform the issuer in writing that you are canceling your account.

Question 22

Which of the following is an example of phishing?

Answer 22

Pretending to be an employee of a financial institution