Question 1

Compared with time deposits, demand deposits

Accepted Answer

Demand deposits allow account holders to withdraw money at any time without any advance notice, unlike time deposits which require funds to be left for a specified period.

Question 2

A time deposit account will typically pay _____ rate of interest compared to a demand account.

Accepted Answer

A time deposit account, such as a certificate of deposit (CD), typically pays a higher rate of interest compared to a demand account, like a checking account, because the funds are committed for a fixed term.

Question 3

Which is a time deposit account?

Accepted Answer

A certificate of deposit (CD) is a time deposit account where money is deposited for a fixed term and earns interest.

Question 4

A certificate of deposit is a type of savings account that pays

Accepted Answer

A certificate of deposit (CD) pays a fixed rate of interest on funds left on deposit for a specified period of time.

Question 5

Citibank is offering a 5-year CD at 3.2% APY. If you invest $10,000, how much will you have when the CD matures?

Accepted Answer

The answer of Citibank is offering a 5-year CD at...

Question 6

A money market mutual fund is a mutual fund that invests in

Accepted Answer

Money market mutual funds invest in short-term debt securities such as Treasury bills, commercial paper, and other low-risk, liquid investments.

Question 7

Which of the following investments is FDIC insured?

Accepted Answer

The FDIC (Federal Deposit Insurance Corporation) insures deposits in banks, such as certificates of deposit (CDs), up to the insured limit. Chase Certificate of Deposit is a bank product and is FDIC insured.

Question 8

Calista has saved $20,000, which she plans to use for a down payment on a home within the next year. She would like to earn interest on her savings and she is concerned about the safety of her money. She is considering the following options. Which option would you recommend for Calista?

Accepted Answer

A money market deposit account is a safe option for short-term savings, offering liquidity and a reasonable interest rate, which aligns with Calista's need to access her funds within a year.

Question 9

Which of the following types of accounts is not insured for $250,000 by the Federal Deposit Insurance Corporation (FDIC)?

Accepted Answer

U.S. Series I Savings Bonds are not insured by the FDIC because they are government securities, not deposit accounts. The FDIC insures deposit accounts like checking, savings, and certificates of deposit up to $250,000 per depositor, per insured bank.

Question 10

Which of the following investments provides purchasing power protection?

Accepted Answer

Series I savings bonds are designed to protect against inflation by adjusting the interest rate semiannually based on changes in the Consumer Price Index.

Question 11

U.S. government Series I bonds protect investors from the risk of

Accepted Answer

Series I bonds are designed to protect investors from inflation by adjusting the interest rate based on changes in the inflation rate.

Question 12

Which of the following pays interest that is exempt from state and local taxation?

Accepted Answer

Series EE bonds are U.S. savings bonds that pay interest exempt from state and local taxes.

Question 13

The Rule of 72 is used to

Accepted Answer

The Rule of 72 is a simple formula used to estimate the number of years required to double the value of an investment at a fixed annual rate of interest by dividing 72 by the annual interest rate.

Question 14

You have invested $1,000 in an account that promises a 3 percent APY. Assuming you leave the original investment and all earned interest in the account, and ignoring taxes, estimate how long will it take to double your money?

Accepted Answer

Using the Rule of 72, you divide 72 by the annual interest rate (3%) to estimate the doubling time, which is approximately 24 years.

Question 15

Filmore has invested $10,000 in an account to help pay for his grandson's education. He expects the account to return 4.5% annually. Use the rule of 72 to estimate how long it will take the $10,000 to double in value.

Accepted Answer

The answer of Filmore has invested $10,000 in an account...

Question 16

Ryan has $5,000 to invest, and he wishes to double his money in 9 years to pay for a vacation to celebrate his 20^th anniversary. Approximately what APY would he require to reach his goal?

Accepted Answer

The correct answer is C) 8%. To double his money in 9 years, Ryan needs an APY of approximately 8%.

Question 17

If you write a check or use your debit card when there isn't enough money in your account to cover the payment, this is known as a(n)

Accepted Answer

An overdraft occurs when you spend more money than you have in your account, resulting in a negative balance.

Question 18

Overdraft protection is an

Accepted Answer

Overdraft protection is typically an automatic loan provided by the bank to cover transactions when there are insufficient funds in the account.

Question 19

Sophie wrote a check to a contractor who did not complete the job. She would like to make sure the contractor is unable to cash her check. She should go to her financial institution and request a(n)

Accepted Answer

A stop payment is a request made to a financial institution to cancel a check before it is cashed or deposited, preventing the contractor from accessing the funds.

Question 20

Which of the following are examples of ways that your identity might be stolen? (Select 3)

Accepted Answer

Dumpster diving, phishing, and pretexting are all examples of ways that your identity might be stolen. Dumpster diving involves searching through trash for discarded documents that contain personal information. Phishing is a type of online scam in which criminals send emails or text messages that appear to be from legitimate organizations, but are actually designed to trick you into revealing your personal information. Pretexting is a type of fraud in which criminals use false pretenses to obtain personal information from you.

Quiz 3: Budgeting and Cash Management

Compared with time deposits, demand deposits

A time deposit account will typically pay _____ rate of interest compared to a demand account.

Which is a time deposit account?

A certificate of deposit is a type of savings account that pays

Citibank is offering a 5-year CD at 3.2% APY. If you invest $10,000, how much will you have when the CD matures?

A money market mutual fund is a mutual fund that invests in

Which of the following investments is FDIC insured?

Calista has saved $20,000, which she plans to use for a down payment on a home within the next year. She would like to earn interest on her savings and she is concerned about the safety of her money. She is considering the following options. Which option would you recommend for Calista?

Which of the following types of accounts is not insured for $250,000 by the Federal Deposit Insurance Corporation (FDIC) ?

Which of the following investments provides purchasing power protection?

U.S. government Series I bonds protect investors from the risk of

Which of the following pays interest that is exempt from state and local taxation?

The Rule of 72 is used to

You have invested $1,000 in an account that promises a 3 percent APY. Assuming you leave the original investment and all earned interest in the account, and ignoring taxes, estimate how long will it take to double your money?

Filmore has invested $10,000 in an account to help pay for his grandson's education. He expects the account to return 4.5% annually. Use the rule of 72 to estimate how long it will take the $10,000 to double in value.

Ryan has $5,000 to invest, and he wishes to double his money in 9 years to pay for a vacation to celebrate his 20^th anniversary. Approximately what APY would he require to reach his goal?

If you write a check or use your debit card when there isn't enough money in your account to cover the payment, this is known as a(n)

Overdraft protection is an

Sophie wrote a check to a contractor who did not complete the job. She would like to make sure the contractor is unable to cash her check. She should go to her financial institution and request a(n)

Which of the following are examples of ways that your identity might be stolen? (Select 3)

Quiz 3: Budgeting and Cash Management

Compared with time deposits, demand deposits

A time deposit account will typically pay _____ rate of interest compared to a demand account.

Which is a time deposit account?

A certificate of deposit is a type of savings account that pays

Citibank is offering a 5-year CD at 3.2% APY. If you invest $10,000, how much will you have when the CD matures?

A money market mutual fund is a mutual fund that invests in

Which of the following investments is FDIC insured?

Calista has saved $20,000, which she plans to use for a down payment on a home within the next year. She would like to earn interest on her savings and she is concerned about the safety of her money. She is considering the following options. Which option would you recommend for Calista?

Which of the following types of accounts is not insured for $250,000 by the Federal Deposit Insurance Corporation (FDIC) ?

Which of the following investments provides purchasing power protection?

U.S. government Series I bonds protect investors from the risk of

Which of the following pays interest that is exempt from state and local taxation?

The Rule of 72 is used to

You have invested $1,000 in an account that promises a 3 percent APY. Assuming you leave the original investment and all earned interest in the account, and ignoring taxes, estimate how long will it take to double your money?

Filmore has invested $10,000 in an account to help pay for his grandson's education. He expects the account to return 4.5% annually. Use the rule of 72 to estimate how long it will take the $10,000 to double in value.

Ryan has $5,000 to invest, and he wishes to double his money in 9 years to pay for a vacation to celebrate his 20th anniversary. Approximately what APY would he require to reach his goal?

If you write a check or use your debit card when there isn't enough money in your account to cover the payment, this is known as a(n)

Overdraft protection is an

Sophie wrote a check to a contractor who did not complete the job. She would like to make sure the contractor is unable to cash her check. She should go to her financial institution and request a(n)

Which of the following are examples of ways that your identity might be stolen? (Select 3)

Ryan has $5,000 to invest, and he wishes to double his money in 9 years to pay for a vacation to celebrate his 20^th anniversary. Approximately what APY would he require to reach his goal?