Overdraft protection is an automatic loan made to your checking account whenever your account does not contain enough cash to cover the checks that you have written against it.
Possible Answers
True
False
2.
The APY can never be the same as the APR.
Possible Answers
True
False
3.
You are considering the purchase of one of two different investments. Investment A is tax exempt and pays 6%. Investment B is taxable and pays 8.33%. You live in a state that imposes no income taxes and are in a 28% federal tax bracket and want to earn the highest after tax return possible. Which of the following is true? (round to two decimal places)
Possible Answers
Investment A is preferred.
Investment B is preferred.
Investments A and B have identical after tax yields.
Investments A and B have identical APYs.
Not enough information has been provided.
4.
Credit Unions and Online Banks typically offer more attractive interest rates to both borrowers and savers.
Possible Answers
True
False
Score:
1/1
5.
What is another name for a depositor-owned financial institution that is a not-for-profit cooperative?
Possible Answers
savings bank
commercial bank
savings and loan association
credit union
none of these
Score:
1/1
6.
When you use your Debit Card or ATM card, you should enter the transaction into your check register.
Possible Answers
True
False
Score:
1/1
7.
Pick the advantage of certificates of deposit from this list of possibilities.
Possible Answers
The interest paid is compounded.
Early withdrawals after 30 days do not incur a penalty.
Interest rates are generally higher than typical savings accounts.
They earn the APY and not the APR.
8.
A Travelers check is typically less liquid than a personal check.
Possible Answers
True
False
9.
You are looking for a Certificate of Deposit for your savings. First Bank offers a 12 month CD with an APR of 8.125% compounded annually. Second Bank offers a 12 month CD with an APR of 8.0% compounded quarterly. If your goal is to maximize your return, which CD should you purchase?
Possible Answers
The First Bank CD because of the higher APR
The First Bank CD because of the higher APY
The Second Bank CD because of the higher APR
The Second Bank CD because of the higher APY
Score:
1/1
10.
The interest rate earned on a money market deposit account is generally higher than the interest earned on a Bank savings account.
Possible Answers
True
False
Score:
1/1
11.
The percentage of the credit card sale the retailer owes to the credit card company is the
Possible Answers
retailer credit acceptance fee.
card usage allowance.
franchise fee.
merchant's discount fee.
interest rebate fee.
12.
Of the five C's of credit, which one would most likely be evaluated closely by creditors for someone who is insolvent?
Possible Answers
Character
Capacity
Collateral
Conditions
Both Capacity and Collateral are correct answers.
13.
Which of the following apply to getting a cash advance with a credit card?
Possible Answers
Cash advances are available at ATM machines.
You begin paying interest immediately.
There may be a cash advance fee.
The interest rate may be higher than on regular purchases.
all of these
14.
Consider the "Five Cs of Credit." The category that considers the amount of assets or property offered as loan security is
Possible Answers
collateral.
capital.
capacity.
character.
none of these
Score:
1/1
15.
A credit bureau is a private organization that maintains credit information on individuals, which it allows subscribers to access for a fee.
Possible Answers
True
False
16.
Sometimes retailers will give you up to a 5% discount if you pay cash for their products instead of using your credit card. Why?
Possible Answers
It is just good customer service, especially for repeat customers.
They are getting close to their monthly charge limit and don't want to go over it.
They are saving on the Merchants Discount Fee so they pass the savings on to you.
Its much less paper work to process cash transactions.
17.
Which of the following statements is most correct regarding a secured credit card?
Possible Answers
It is a valuable form of credit insurance - you are protected against loss if the card is lost or stolen.
It is useful to someone who has bad credit or no credit established yet.
It provides a higher level of user security, using technology to prevent illegal use.
Compared to non-secured credit cards, it always carries a much lower rate of interest.
none of these
Score:
1/1
18.
Which of the following is not an advantage of credit cards?
Possible Answers
convenience or ease of shopping
emergency use
allows for online shopping
offers competitive interest rates
allows for consumption before the purchase is fully paid for
19.
If you are a convenience user of credit cards, ________ is important to you.
Possible Answers
low annual fee
interest-free grace period
card benefits and perks
both low annual fee and interest-free grace period
low annual fee, interest-free grace period, and card benefits and perks
20.
To a credit user, the perks and benefits are the most important determinant when choosing a credit card.
how do you know what the answers are?
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