Family Finance Exam 1 Chapter 5

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Credit unions are owned by

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Their Members

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Fixed-time deposits

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Require that the funds be left on deposit for a specified period of time.

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If you want an individually owned banking account to go to a specific person immediately upon your death, you would make a payable at death designation on the account.

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True

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a generic term describing a variety of interest-earning accounts that pay relatively high rates of interest (as compared to regular savings accounts) that have some limited check-writing privileges.

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A Money Market Account

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CDs bought through a stockbroker are known as

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Brokered certificates of deposit.

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In cash management, safety is defined as

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Freedom from financial risk.

Front 7

The mechanism for informing EFT users of their rights and responsibilities is called a(n)

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Disclosure Statement

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A federal government agency that administers a fund to insure accounts at commercial banks and certain other depository institutions

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FDIC

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offers access to certain minimal financial services that every consumer ought to have regardless of income

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Lifeline Banking Account

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The interest rate of most concern to holder's of a savings account or other paying deposit account is the

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Annual Percentage Yield

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The NOW account pays ... interest and the super NOW account pays ... interest

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No interest, and does pay interest

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The super NOW account funds are placed in ... and the NOW account funds are placed in...

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A money market account, and are not

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Cash management opportunity that is not available through a stock brokerage firm

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Super NOW account

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Series HH savings bonds can only be purchased

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by exchanging Series EE or Series E savings bonds.

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All demand deposits are called NOW accounts since both terms mean that you can get your money whenever demanded.

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False

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Manages the financial assets of another.

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A Trustee

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Generally have a tiered interest feature requiring that the interest rate revert to the lower NOW account rate if funds on deposit fall below a specified minimum.

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Super NOW accounts and money market deposit accounts

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A depositor whose checking account balance is usually over $1,000 but which drops to $100 or less for a few days near payday would want to have a(n)

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Average-balance account.

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The combination of a base interest rate and a higher rate for portions on deposit that exceed a set amount such as $1000 is a feature of

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Tiered interest rate accounts.

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Which of the following ways of protecting yourself from writing checks when you have insufficient funds in your account requires that you also have a savings account at the same financial institution?

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Automatic Funds Transfer

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The safest form of endorsement on a check is a

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Restrictive Endorsement

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Is not offered by a depository institution?

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Money Market Mutual Fund

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A feature of an asset management account is that...

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One statement is used to summarize your activity for all your major financial activities with the financial institution.

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You have 3 checking accounts at a federally insured financial institution; an individual account, a joint-account with your spouse, and a joint account with a parent. What is the total amount of insurance you would have on these accounts?

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$200,000

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Traditional checking accounts which pay no interest are technically known as

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Demand Deposits

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specializes in earning a relatively safe and high return by buying securities that have very short-term maturities, generally less than one year?

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Money Market Mutual Fund

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The type of checking account that is available through a credit union is called a(n)

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Share Draft Account

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Persons interested in a savings account that permits frequent deposits and withdrawals would want to choose a

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Statement Account

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CD's have:

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A variable interest rate, the best have an interest rate minimum, and they have the main virtue of all CDs, which is predictability.

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Which type of CD allows the saver an opportunity to request an increase to a higher interest rate once during the term of the CD?

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A Bump-up CD

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If you want to open a joint checking or savings account with another person such that at your death your share of the account would go to your heirs rather than the joint owner of the account, you would choose a(n)

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Tenancy in common account.