Personal Finance 13th Edition by E. Thomas Garman – Test Bank

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Description Personal Finance 13th Edition by E. Thomas Garman – Test Bank Sample Questions Instant Download With Answers Chapter_03_Financial_Statements__Tools__and_Budgets

1. Financial planning focuses primarily on spending wisely. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

financial planning also includes the management of risk and plans for

DATE CREATED:

9/22/2017 12:59 AM

DATE MODIFIED:

9/26/2017 1:24 AM

2. Financial planning begins by acquiring a good job that provides a person with enough extra income to manage. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

financial planning begins by examining values and setting financ

DATE CREATED:

9/22/2017 1:00 AM

DATE MODIFIED:

9/26/2017 1:27 AM

3. Financial planning is the process of developing and implementing short-term plans to achieve financial objectives. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

financial planning is long-term. 3.1

DATE CREATED:

9/22/2017 1:01 AM

DATE MODIFIED:

9/26/2017 1:27 AM

4. Financial planning is a single, customized plan regarding a person’s financial affairs. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

financial planning involves a series of plans. 3.1

DATE CREATED:

9/22/2017 1:03 AM

DATE MODIFIED:

9/26/2017 1:29 AM

5. Financial planning is only for the rich. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

people of all income and wealth levels benefit from doing financia

DATE CREATED:

9/22/2017 1:04 AM

DATE MODIFIED:

9/26/2017 1:29 AM

6. Values have little impact on financial goals. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

personal values are the starting point for setting financial go

DATE CREATED:

9/22/2017 1:05 AM

DATE MODIFIED:

9/26/2017 1:30 AM

7. It is not necessary that your values be consistent with your financial and lifestyle goals. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

financial and lifestyle goals should be consistent with your v

DATE CREATED:

9/22/2017 1:07 AM

DATE MODIFIED:

9/26/2017 1:31 AM

8. Values are fundamental beliefs regarding what consumer goods are worth. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

DATE CREATED:

9/22/2017 1:09 AM

DATE MODIFIED:

9/26/2017 1:31 AM

9. The concept of “pay myself first,” saving and investing before you pay other expenses, is a characteristic of successful financial managers. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.1

DATE CREATED:

9/22/2017 1:26 AM

DATE MODIFIED:

9/26/2017 1:32 AM

10. Financial planning begins by examining one’s values.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.1

DATE CREATED:

9/22/2017 1:28 AM

DATE MODIFIED:

9/26/2017 1:33 AM

11. Your goal in financial planning is to manage your income and wealth in such a way that your goals are met in a suitable manner. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.1

DATE CREATED:

9/22/2017 1:30 AM

DATE MODIFIED:

9/26/2017 1:33 AM

12. Paying off debts is an example of a financial goal even though it does not involve a direct purchase. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.1

DATE CREATED:

9/22/2017 1:31 AM

DATE MODIFIED:

9/26/2017 1:34 AM

13. Effective financial goals should be stated explicitly in terms of purpose, dollar amounts, and projected date for achievement. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.1

DATE CREATED:

9/22/2017 1:32 AM

DATE MODIFIED:

9/26/2017 1:35 AM

14. Among the intermediate-term goals for capital accumulation is having a fund for emergencies. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify your financial values, goals and strategies

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.1

DATE CREATED:

9/22/2017 1:33 AM

DATE MODIFIED:

9/26/2017 1:36 AM

15. Reducing the number of bank and credit accounts that each partner brings into the marriage can save money on account fees. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 1:35 AM

DATE MODIFIED:

9/26/2017 1:36 AM

16. A balance sheet describes an individual’s financial progress over a period of time, generally a year. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2 a balance sheet shows an individual’s financial status on

DATE CREATED:

9/22/2017 1:36 AM

DATE MODIFIED:

9/26/2017 1:37 AM

17. A cash-flow statement summarizes transactions that have taken place over a specific period of time. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:01 AM

DATE MODIFIED:

9/26/2017 1:38 AM

18. Monetary assets include cash and near-cash items that can be readily converted to cash.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:04 AM

DATE MODIFIED:

9/26/2017 1:39 AM

19. Tangible assets are assets whose primary purpose is to provide maintenance of a lifestyle. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:07 AM

DATE MODIFIED:

9/26/2017 1:39 AM

20. Successful financial planning requires identifying the one best investment asset for an individual, then putting all of the individual’s surplus into that asset. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

successful financial planning involves using several investment asset

DATE CREATED:

9/22/2017 2:11 AM

DATE MODIFIED:

9/26/2017 1:40 AM

21. In general, tangible assets do not depreciate in value over time. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2 most tangible assets do depreciate over time.

DATE CREATED:

9/22/2017 2:08 AM

DATE MODIFIED:

9/26/2017 1:41 AM

22. Both individual retirement accounts (IRAs) and non-residential real estate property are investment assets. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:13 AM

DATE MODIFIED:

9/26/2017 1:42 AM

23. The balance sheet serves as an assessment of assets and liabilities at fair market value as of a specified date. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:15 AM

DATE MODIFIED:

9/26/2017 1:43 AM

24. For most people, the only way to increase net worth is to spend less than their income; people must save and invest. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:19 AM

DATE MODIFIED:

9/26/2017 1:44 AM

25. A balance sheet shows flows of income in and expenses out of your finances for a given period of time. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2 the balance sheet shows the value of your assets and liab

DATE CREATED:

9/22/2017 2:20 AM

DATE MODIFIED:

9/26/2017 1:45 AM

26. Short-term liabilities are obligations to be paid off within one year. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:22 AM

DATE MODIFIED:

9/26/2017 1:46 AM

27. The liability section of a balance sheet would include money owed to a doctor or a lawyer but would not include money owed to a friend. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2 all monies owed are included

DATE CREATED:

9/22/2017 2:24 AM

DATE MODIFIED:

9/26/2017 1:47 AM

28. A person who has a negative net worth is technically insolvent. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:25 AM

DATE MODIFIED:

9/26/2017 1:48 AM

29. A cash-flow statement for a previous year would show whether you were able to live within your income. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:30 AM

DATE MODIFIED:

9/26/2017 1:49 AM

30. A cash-flow statement shows flows of income in and expenses out of your finances for a given period of time. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:32 AM

DATE MODIFIED:

9/26/2017 1:50 AM

31. A cash-flow statement shows the value of your assets and liabilities as of a specific date. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure your fina

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2 the cash-flow statement shows flows of income in and expense

DATE CREATED:

9/22/2017 2:34 AM

DATE MODIFIED:

9/26/2017 1:51 AM

32. Keeping track of all income and expenses is very important to achieving your financial objectives. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:37 AM

DATE MODIFIED:

9/26/2017 1:51 AM

33. Savings set aside can be categorized as both fixed and variable expenses. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:40 AM

DATE MODIFIED:

9/26/2017 1:52 AM

34. It is usually easy to reduce a fixed expense. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

fixed expenses are difficult to reduce. 3.2

DATE CREATED:

9/22/2017 2:41 AM

DATE MODIFIED:

9/26/2017 1:53 AM

35. The surplus section on an individual’s cash-flow statement is similar to net profit for a business. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:43 AM

DATE MODIFIED:

9/26/2017 1:53 AM

36. Most people keep track of their finances on a cash basis rather than on an accrual basis. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:44 AM

DATE MODIFIED:

9/26/2017 1:54 AM

37. A surplus demonstrates that you are managing your financial resources successfully and do not have to use savings or borrow to make financial ends meet. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:47 AM

DATE MODIFIED:

9/26/2017 1:55 AM

38. Financial ratios are numerical calculations that make assessments of financial conditions more complex. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2 financial ratios simplify the process of assessing your fina

DATE CREATED:

9/22/2017 2:49 AM

DATE MODIFIED:

9/26/2017 1:56 AM

39. Many experts recommend that people should have assets equal to one year’s

expenses in emergency cash reserves. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financial he

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

financial experts tend to recommend a three-month emergency fund altho

DATE CREATED:

9/22/2017 2:51 AM

DATE MODIFIED:

9/26/2017 1:56 AM

40. The liquidity ratio reveals how many months it would take to convert all assets into cash. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

this ratio relates only to monetary assets and how long they would las

DATE CREATED:

9/22/2017 2:54 AM

DATE MODIFIED:

9/26/2017 1:57 AM

41. You can use the liquidity ratio to determine the number of months that you could continue to meet your expenses using only your monetary assets should all income cease. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 2:57 AM

DATE MODIFIED:

9/26/2017 1:58 AM

42. A family with two income earners will always need a greater amount of cash reserves than a family with one earner. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financial he

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

the need for cash reserves relates to the amount of income and not wheth

DATE CREATED:

9/22/2017 3:07 AM

DATE MODIFIED:

9/26/2017 1:58 AM

43. By analyzing financial statements, a person can assess his or her financial

condition and progress. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure yo

QUESTION TYPE:

True / False

HAS VARIABLES:

False

NATIONAL STANDARDS:

United States – United States – FN_3 – Reporting

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 3:08 AM

DATE MODIFIED:

9/26/2017 2:00 AM

44. Households dependent on the income from a self-employed person may need a larger emergency cash reserve than others. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 3:11 AM

DATE MODIFIED:

9/26/2017 2:01 AM

45. The asset-to-debt ratio compares total assets with total liabilities and is a broad measure of a household’s financial liquidity. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 3:13 AM

DATE MODIFIED:

9/26/2017 2:07 AM

46. A person is insolvent when he or she doesn’t have enough current income to pay all of his or her current bills. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2 insolvent refers to not having enough assets to cover your liabiliti

DATE CREATED:

9/22/2017 3:14 AM

DATE MODIFIED:

9/26/2017 2:08 AM

47. A low asset-to-debt ratio is a positive indicator of financial well-being.

a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

a high asset-to-debt ratio is desirable. 3.2

DATE CREATED:

9/22/2017 3:16 AM

DATE MODIFIED:

9/26/2017 2:08 AM

48. The debt-to-income ratio provides a view of total debt burden of an individual or family by comparing the dollars spent on gross annual debt repayments with gross annual income. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 3:18 AM

DATE MODIFIED:

9/26/2017 2:09 AM

49. A debt-to-income ratio of 0.36 or less is considered manageable for most families. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

3.2

DATE CREATED:

9/22/2017 3:20 AM

DATE MODIFIED:

9/26/2017 2:09 AM

50. A debt-to-income ratio of 0.36 or less indicates that disposable income is adequate to make debt repayments. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Use balance sheets and cash-flow statements to measure your financ

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

a ratio of 0.36 or less indicates that gross income is adequate to mak

DATE CREATED:

9/22/2017 3:22 AM

DATE MODIFIED:

9/26/2017 2:10 AM

Chapter_05_Managing_Checking_and_Savings_Accounts True / False

1. The goal of monetary asset management is to maximize interest earnings and minimizing fees while keeping funds safe and readily available. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 5:38 AM

DATE MODIFIED:

9/26/2017 5:40 AM

2. In monetary assert management, safety means the speed and ease with which an asset can be converted to cash. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1 safety is freedom from financial risk.

DATE CREATED:

9/26/2017 5:42 AM

DATE MODIFIED:

9/26/2017 5:42 AM

3. Monetary asset management includes setting money aside in a savings account for use later when spending or investing. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 5:44 AM

DATE MODIFIED:

9/26/2017 5:45 AM

4. Monetary asset management focuses primarily on funds kept readily available for investments. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify the goals of monetary asset management and the sources of such fina

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1 monetary asset management focuses on funds kept for day-to-day living e opportunities.

DATE CREATED:

9/26/2017 5:47 AM

DATE MODIFIED:

9/26/2017 5:48 AM

5. Liquidity is the speed and ease with which an asset can be converted to cash.

a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 5:55 AM

DATE MODIFIED:

9/26/2017 5:56 AM

6. Unlike other providers of financial services, depository institutions can both take deposits and make loans to consumers. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 5:57 AM

DATE MODIFIED:

9/26/2017 5:58 AM

7. Today, even stock brokerages and insurance companies provide certain products for use in monetary asset management. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:02 AM

DATE MODIFIED:

9/26/2017 6:02 AM

8. Credit unions typically offer the widest variety of financial services. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1 commercial banks offer the widest variety.

DATE CREATED:

9/26/2017 6:04 AM

DATE MODIFIED:

9/26/2017 6:05 AM

9. Commercial banks typically offer the widest variety of financial services. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:05 AM

DATE MODIFIED:

9/26/2017 6:06 AM

10. The primary focus of mutual savings banks is to accept deposits from consumers and provide mortgage and consumer loans. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:07 AM

DATE MODIFIED:

9/26/2017 6:07 AM

11. Deposits in credit unions with federal charters are insured through the National Credit Union Share Insurance Fund (NCUSIF). a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:09 AM

DATE MODIFIED:

9/26/2017 6:10 AM

12. Mutual savings banks are called “mutual” because the depositors own the institution and share in the earnings. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:11 AM

DATE MODIFIED:

9/26/2017 6:11 AM

13. Credit unions with federal charters have their accounts insured through the FDIC. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1 they are insured through the National Credit Union Share Insuran

DATE CREATED:

9/26/2017 6:13 AM

DATE MODIFIED:

9/26/2017 6:15 AM

14. The total protection an individual might have with any institution, including all its branches, is $250,000 with no more than $125,000 each on single-ownership and joint accounts. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1 the total protection can be $250,000 on individual and joint acco

DATE CREATED:

9/26/2017 6:17 AM

DATE MODIFIED:

9/26/2017 6:17 AM

15. A mutual fund is an investment company that raises money by selling shares to the public and then invests that money in a diversified portfolio of investments. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:19 AM

DATE MODIFIED:

9/26/2017 6:20 AM

16. One can increase the amount of money covered by FDIC insurance by dividing his or her money among different branch offices of the same depository institution. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify the goals of monetary asset management and the sources of s

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.1 you must spread funds across several institutions in order to expan

DATE CREATED:

9/26/2017 6:21 AM

DATE MODIFIED:

9/26/2017 6:22 AM

17. Money deposited in mutual funds is insured by the federal government. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify the goals of monetary asset management and the sources of s

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1 the federal deposit insurance programs only cover funds in accoun

DATE CREATED:

9/26/2017 6:23 AM

DATE MODIFIED:

9/26/2017 6:23 AM

18. A stock brokerage firm is a licensed financial institution that specializes in selling and buying stocks, bonds, and other investment alternatives. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:24 AM

DATE MODIFIED:

9/26/2017 6:24 AM

19. Stock brokerage firms are federally insured institutions. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Identify the goals of monetary asset management and the sources of s

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1 the federal deposit insurance programs only cover funds in accoun

DATE CREATED:

9/26/2017 6:26 AM

DATE MODIFIED:

9/26/2017 6:29 AM

20. Stock brokerage firms earn commissions on clients’ stock transactions. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Identify the goals of monetary asset management and the sources o

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.1

DATE CREATED:

9/26/2017 6:31 AM

DATE MODIFIED:

9/26/2017 6:31 AM

21. Checks allow you to transfer funds from your account to other people and organizations. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 6:33 AM

DATE MODIFIED:

9/26/2017 6:33 AM

22. The only reason to have a checking account is so that one has an account for writing checks. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2 checking accounts may earn interest.

DATE CREATED:

9/26/2017 6:35 AM

DATE MODIFIED:

9/26/2017 6:35 AM

23. When you use a debit card, funds are instantaneously removed from your account. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 6:37 AM

DATE MODIFIED:

9/26/2017 6:37 AM

24. Checking accounts that pay no interest are called NOW accounts. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2 they are called demand-deposit accounts.

DATE CREATED:

9/26/2017 6:39 AM

DATE MODIFIED:

9/26/2017 6:39 AM

25. A checking account is sometimes called a transaction account. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 6:48 AM

DATE MODIFIED:

9/26/2017 6:49 AM

26. The interest rate you earn on your checking and savings account can vary with the amount you have in the accounts. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 6:51 AM

DATE MODIFIED:

9/26/2017 6:51 AM

27. A share draft account is the credit union version of a NOW account. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 6:54 AM

DATE MODIFIED:

9/26/2017 6:54 AM

28. Share draft accounts at credit unions are generally more expensive than NOW accounts at commercial banks. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2 credit unions generally charge the lowest fees of all depository institu

DATE CREATED:

9/26/2017 6:56 AM

DATE MODIFIED:

9/26/2017 6:56 AM

29. NOW accounts may pay slightly higher interest rates on larger balances. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 6:57 AM

DATE MODIFIED:

9/26/2017 6:58 AM

30. NOW accounts get their name because they are considered demand deposits. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2 NOW stands for negotiable order of withdrawal and is the type of chec

DATE CREATED:

9/26/2017 6:59 AM

DATE MODIFIED:

9/26/2017 6:59 AM

31. College students who are independent of their parents may qualify for very lowcost lifeline banking accounts. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:01 AM

DATE MODIFIED:

9/26/2017 7:01 AM

32. NOW accounts and share draft accounts with tiered interest will pay higher interest rates on larger balances. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:02 AM

DATE MODIFIED:

9/26/2017 7:03 AM

33. Acceptance for a lifeline banking account is dependent on one’s income and net worth. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:04 AM

DATE MODIFIED:

9/26/2017 7:04 AM

34. A stop-payment order works only if the check has not yet cleared your financial institution. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:06 AM

DATE MODIFIED:

9/26/2017 7:06 AM

35. There are no fees charged for a stop-payment order. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2 such orders expire after six months unless renewed.

DATE CREATED:

9/26/2017 7:07 AM

DATE MODIFIED:

9/26/2017 7:08 AM

36. A cashier’s check is drawn on the account of the financial institution itself. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:09 AM

DATE MODIFIED:

9/26/2017 7:10 AM

37. Fees of no more $10 are generally charged for money orders, certified checks and cashier’s checks. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2 fees are based on the amount of the instrument and can be much hig

DATE CREATED:

9/26/2017 7:11 AM

DATE MODIFIED:

9/26/2017 7:11 AM

38. If your checking account balance drops to less than perhaps $50 at any point during a month you would likely be better off with a minimum deposit account in order to avoid fees. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet th

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2 an average-balance account would be better in this situation as your av

DATE CREATED:

9/26/2017 7:13 AM

DATE MODIFIED:

9/26/2017 7:14 AM

39. A money order is a checking instrument bought for a particular amount. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:20 AM

DATE MODIFIED:

9/26/2017 7:26 AM

40. When a bank offers a “free” checking account, that means there are no fees for writing bad checks or using another bank’s ATM. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2 “free” only relates to the assessment of monthly service charges.

DATE CREATED:

9/26/2017 7:22 AM

DATE MODIFIED:

9/26/2017 7:22 AM

41. Funds on deposit in a savings account are considered time deposits rather than demand deposits. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:24 AM

DATE MODIFIED:

9/26/2017 7:28 AM

42. Funds on deposit in a savings account are considered demand deposits. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2 they are considered time deposits.

DATE CREATED:

9/26/2017 7:29 AM

DATE MODIFIED:

9/26/2017 7:29 AM

43. Time deposits are savings that are expected to remain on deposit in a financial institution for an extended period. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:30 AM

DATE MODIFIED:

9/26/2017 7:31 AM

44. Demand deposits are savings that are expected to remain on deposit in a financial institution for an extended period. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2 time deposits are expected to remain on deposit for an extended peri

DATE CREATED:

9/26/2017 7:32 AM

DATE MODIFIED:

9/26/2017 7:32 AM

45. Institutions usually have a rule requiring that time deposit account holders give 30 to 60 days notice for withdrawals, although this restriction is seldom enforced. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:34 AM

DATE MODIFIED:

9/26/2017 7:34 AM

46. Time deposits specify a period that the savings must be left on deposit, such as six months or three years. a.

True

b.

False

ANSWER:

False

POINTS:

1

DIFFICULTY:

Moderate

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2 only fixed-time deposits such as CDs have this requirement.

DATE CREATED:

9/26/2017 7:35 AM

DATE MODIFIED:

9/26/2017 7:36 AM

47. Fixed-time deposits specify a period of time that the savings must be left on deposit. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Understanding

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:37 AM

DATE MODIFIED:

9/26/2017 7:37 AM

48. Institutions have a rule requiring that savings account holders give 30 to 60 days’ notice for withdrawals. a.

True

b.

False

ANSWER:

True

POINTS:

1

DIFFICULTY:

Easy

REFERENCES:

Understand and employ the various types of accounts available to meet t

QUESTION TYPE:

True / False

HAS VARIABLES:

False

KEYWORDS:

Bloom’s: Remembering

OTHER:

Analytic

NOTES:

5.2

DATE CREATED:

9/26/2017 7:40 AM

DATE MODIFIED:

9/26/2017 7:40 AM