When a person puts their money in a bank they may find themselves using more than they can and some banking institutions offer their clients free money management advice. The quiz below tests your understanding on banking and money management. Give it a try and get ready to broaden your knowledge.
A money market mutual fund
A passbook savings account
A certificate of deposit
A US Series HH bond
To undertake transactions
To avoid credit
To have an emergency reserve
To have a store of value
3-6
5-7
7-12
12-15
A checking account
A savings account
A certificate of deposit
The above three are equally liquid.
Protects each deposit account up to $100,000.
Protects each depositor up to $100,000.
Protects both the deposit and depositor up to $1,000,000.
Is available only by depositor choice and then a small fee must be paid
Make sure an account is federally insured.
Make sure an account is state insured.
Avoid any institution that is not a commercial bank
Avoid using out-of-state institutions.
An unlimited number of deposits or withdrawals each month
No minimum balance requirement
Interest rates are higher than money market rates.
Interest rates are higher than money market rates.
Invest only in MMDAs.
Pool resources of many investors to purchase liquid and high-yielding securities.
Issued by the Treasury, commercial banks, and other corporations.
Are established by banks and other financial institutions to help depositors manage their liquid assets. Answer: are established by banks and other financial institutions to help depositors manage their liquid assets. Answer: are established by banks and other financial institutions to help depositors manage their liquid assets. Answer: are established by banks and other financial institutions to help depositors manage their liquid assets
You pay a penalty for early redemption.
You "lock in" (are guaranteed) the stated interest if you hold the CD until maturity.
They are preferred over money market deposits if you expect interest rates to fall
They have a minimum maturity of three years.
Safety
Low charges
Size
Geographical convenience
A special endorsement
A deposit endorsement.
A restrictive endorsement.
A blank endorsement.
Sign his/her name under Monica's and cash the check.
Write "for deposit only" under Monica's signature and deposit it to his/her account.
Do nothing; the check must be made payable to him/her before it can be cashed.
Do nothing; since he or she is neither a payer or payee.
An effective way to prevent them is to "overload" the account.
They can be avoided by arranging an automatic transfer from a savings account.
They are inexpensive nuisances because banks usually do not charge for overdrafts.
They differ from "bounced checks" in that "bouncing" a check is a mistake while an overdraft is deliberate.
Maintain a larger-than-normal account balance. to cover the overdraft.
Arrange for automatic transfers from a savings account.
Rrange for a credit-card loan effective method of protecting against overdrafts generally is to
Ignore them since banks do not charge for overdrafts.
Immediately
) on the next business day.
Two to three days after the deposit day
After the check clears the Federal Reserve System.
Issue an immediate stop payment for each check.
Purchase account insurance to avoid potential losses.
Inform the bank and open a new account.
Do nothing.
Wait!
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