BANKING TEST BANK EXAM( QUESTIONS WITH CORRECT VERIFIED ANSWERS ) RATED A+ ;; GUARANTEED, Exams of Banking and Finance

Download BANKING TEST BANK EXAM( QUESTIONS WITH CORRECT VERIFIED ANSWERS ) RATED A+ ;; GUARANTEED and more Exams Banking and Finance in PDF only on Docsity! BANKING TEST BANK EXAM( QUESTIONS WITH CORRECT VERIFIED ANSWERS ) RATED A+ ;; GUARANTEED PASS a person makes a deposit of $10,000 or more into a bank account, the bank must notify the A) US Treasury Department. B) Federal Deposit Insurance Corporation. (FDIC). C) State Banking Commission. D) Federal Reserve Board. - ANSWER A) US Treasury Department. Joan wants to open a checking account and wanders if checking accounts pay interest. How do you answer her question? a) all checking accounts pay interest b) Some types of checking accounts pay interest c) checking accounts never pay interest d) checking accounts pay interest if the account balance does not fall below $300 - ANSWER b) some types of checking accounts pay interest a bank Certificate of Deposit is a: a) savings instrument that requires a deposit for a period of time during which the saver can withdraw money from the plan at any time without a penalty b) savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals c)cash deposit in a savings account that earns interest d) certificate for deposits that are issued for half the face value - ANSWER b) savings instrument that requires a deposit for a period of time during which there is a penalty for withdrawals Pat has a savings account and a car loan from a not-for-profit financial institution owned by its members. She is probably a member of what type of financial institution? A) Credit union B) Commercial bank C) Savings and loan association D) Investment club - ANSWER A) Credit union The financial institution where Ms. Sanchez has her checking account will continue to pay out money for the checks she writes as long as: A) She uses checks from her checkbook B) The financial institution has sufficient funds C) There is enough money in Ms. Sanchezs account to cover the amount of the checks D) She maintains a good record of deposits and handles her account responsibly - ANSWER C) There is enough money in Ms. Sanchezs account to cover the amount of the checks Travelers checks, often used for vacations: A) Are equivalent to credit cards B) Are free at most banks C) Function as cash and are easily replaced if lost D) Are FDIC insured - ANSWER C) Function as cash and are easily replaced if lost Which financial product may pay a dividend? A) Savings account B) Money market account C) Certificate of deposit D) Common stock - ANSWER D) Common stock Financial services and products generally offered by banks and credit unions include: A) Real estate listings B) Savings and loans A) Series EE savings bond B) Certificate of deposit C) 50 shares of ABC Co. stock D) ABC Co. bond - ANSWER A) Series EE savings bond The most liquid type of investment is: A) A corporate bond B) A certificate of deposit C) Real estate holding D) A money market account - ANSWER D) A money market account A teenage boy has opened a checking account. He is surprised to find that though he is getting a written bank statement each month he is not getting his canceled checks returned. The teenager should be aware that the reason canceled checks are NOT returned is to A) protect him from providing opportunities for forgery. B) insure that he does not receive important materials he is likely to lose. C) lessen the bank?s need to maintain records of check transactions. D) save the bank money associated with returning copies of these checks. - ANSWER D) save the bank money associated with returning copies of these checks. What action should a person take who must make a tuition payment at the end of August each year? A) Decide how much money will be needed and then place 1/12th of that amount in a separate account each month. B) Divide the total amount of money that will be needed into 12 equal parts and invest that amount in stocks. C) Obtain a short- term collateralized loan for the needed amount of money. D) Plan to open a new credit card account that will be used to charge the needed amount of money. - ANSWER A) Decide how much money will be needed and then place 1/12th of that amount in a separate account each month. When a person is reconciling a checking account and notices that the balance in the checkbook does not match the balance on the statement from the bank, which action is it appropriate for the person to take first? A) Determine that checks already written have cleared. B) Deposit sufficient funds to adjust the balance in the checkbook to match the bank's balance. C) Adjust the balance in the checkbook so it is the same as the bank's balance. D) Notify the bank in writing to adjust the statement. - ANSWER A) Determine that checks already written have cleared. Doug wants to buy a car in two months, but does not have enough money. What is the best way for Doug to get the money he needs? A) Purchase a certificate of deposit B) Take out a cash loan C) Open a money market account D) Apply for a thirty year mortgage - ANSWER B) Take out a cash loan Margaret wants to store a valuable coin collection and important papers. Generally, consumers should: A) Store valuables in a cabinet at home B) Rent a safe deposit box for their valuables C) Hand valuables over to their attorney D) Store valuables in locked drawer - ANSWER B) Rent a safe deposit box for their valuables When James received his paycheck, he planned to cash it at a check cashing store. You advise him to cash it at his own bank if possible. Why? A) They typically require a two day waiting period before giving cash B) They typically charge high fees C) There is likely to be a ceiling on the size of the check he can cash D) They generally require a co-signor - ANSWER B) They typically charge high fees How can individuals be prepared for losing their job or having a large medical expense? A) Maintain a checking account with sufficient funds B) Pay credit card bills on time C) Prepare a budget D) Save at least three months of income - ANSWER D) Save at least three months of income Money orders are: A) Distributed by the Treasury Department B) Available for no fee at banks and retail stores C) A purchased certificate to pay a specified amount to a specific payee D) A certified check used to pay a specified amount to a specific payee - ANSWER C) A purchased certificate to pay a specified amount to a specific payee You have a checking account balance of $100 and you deposit a personal $200 check from your brother in your checking account. When will you be able to withdraw $150 in cash? A) The same day as the $200 deposit B) 3 to 7 days later, depending on your bank's check clearance policy C) After receiving a checking account statement at the end of the month D) On the day you make your next deposit - ANSWER B) 3 to 7 days later, depending on your bank's check clearance policy The National Credit Union Administration (NCUA) insures accounts in: A) Credit unions B) Commercial banks C) Brokerage firms D) Savings banks - ANSWER A) Credit unions The best reason for depositing money in a bank or credit union savings account instead of keeping your money "under the mattress" is that: A) Money deposited in savings accounts are F.D.I.C. insured B) Most savings accounts earn a guaranteed rate of interest The FDIC insures bank deposits in most banks up to a maximum of ____. A) 75,000 B) 50,000 C) 100,000 D) None of the Above - ANSWER D) None of the Above Having the bank deduct a certain amount from your checking account each month to pay a bill is a(n) ____. A) automatic withdrawal B) register C) fee D) None of the Aove - ANSWER A) automatic withdrawal A bank's own personal check signed by the bank's cashier is a ____. A) money order B) cashiers check C) traveler's check D) None of the Above - ANSWER B) cashiers check The book in which a person keeps a record of the checks he or she has written and the deposits made is called a ____. A) folder B) check register C) balance book D) None of the Above - ANSWER B) check register Which of the following are checks for which you pay in advance and, if they are lost or stolen, the company from whom you bought these checks will replace them? A) cancelled check B) outstanding check C) traveler's check D) None of the above - ANSWER C) traveler's check Kirk recently opened his own checking account with a local bank. The first check he wrote was to BestBi Food Mart for groceries and miscellaneous items in the amount of $43.75. Since BestBi is the business to whom Kirk wrote the check, BestBi is considered to be the ____. A) payer B) drawer C) payee D) drawee - ANSWER payee Taylor works as a real estate agent and is an extremely busy young woman. Her work days are filled with appointments with clients who are either selling or buying homes. Her schedule is highly unpredictable, making it almost impossible to go to her bank to conduct her banking business. What service can she arrange with her employer and her bank so that her paycheck is conveniently and automatically deposited into her account each pay period? A) pay by phone B) ATM deposit C) direct deposit D) on line deposit - ANSWER C) direct deposit Each month Hope's bank sends her an envelope containing her bank statement and the checks that have cleared her checking account that particular month. Each of these checks have been stamped indicating that her bank has paid the check. What are these checks called? A) reconsiled B) cleared C) paid D) canceled - ANSWER D) canceled Octavio travels extensively on business often traveling out of state. Because of his traveling and hectic schedule, he does not like to carry a large amount of cash with him nor does he want to carry his checkbook. What could he opt to use that would provide electronic access to his checking account to make payments at stores, restaurants, etc., by immediately transferring funds from his checking account into the store's account? A) ATM B) PIN C) debit card D) Store card - ANSWER C) debit card all of the following are true about prepaid cards EXCEPT: a-prepaid cards typically include a lot of fees b-prepaid cards are a useful option for someone who is unbanked to make online purchases c-prepaid cards are a great way to build credit d-prepaid cards are usually accepted anywhere that debit and credit cards are accepted - ANSWER c- prepaid cards are a great way to build credit you are developing a savings plan and using short-, medium-, and long term goals to motivate you. Which represents possible possible goals from short term to long term ? a-retirement, a house down payment, college tuition b-a new cell phone, college tuition, a house down payment c-a new cell phone, dinner with friends this weekend, a new bike d-retirement, college tuition, a vacation - ANSWER b-a new cell phone, college tuition, a house down payment Juan saved $1000 from his summer job cleaning pools. Which of these account types would work best for him i he doesn't need access to the money for a number of years and wants to earn the highest interest rate? - ANSWER certificate of deposit Monthly income should be separated as- 50% should go to ____, 30% should go to ____, and 20% should go to ____ - ANSWER needs, wants, and savings which represents the best time to start saving for your retirement? - ANSWER As soon as you have your first full time job.