Copy of PF Unit 2 Banking Review (5/21/2025)

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25 questions

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Select the best answer for each question.  You have one class period to complete the test. Internet access will be blocked during the test. (Worth 54 points)

Select the best answer for each question.  Submit review when you are done. The review will help you study for the test. (Worth 25 points)

Marcus just opened a checking account and wants a convenient way to buy groceries and get cash from ATMs without carrying large amounts of cash.
Which type of card would allow Marcus to make purchases in stores and withdraw money directly from his checking account?

Debit card

Credit card

Prepaid card

Gift card

Samantha is worried that she might accidentally spend more money than she has in her checking account. Her bank offers overdraft protection, and she’s considering signing up.
What does overdraft protection help Samantha avoid?

Earning interest on her account

Paying monthly maintenance fees and ATM fees

Having her debit card declined due to insufficient funds

Paying Inactive account fees

Elena is choosing a bank and notices that one option is “FDIC insured.” She wants to make sure her money is safe if something happens to the bank.
What is the main purpose of a bank being insured by the Federal Deposit Insurance Corporation (FDIC)?

To protect customers' money up to $250,000 if the bank fails 

It insures a person's loans can be written off after a certain period of time.

It insures a person's bank assets against government deficits.

To protect customers' money up to $100,000 if the government fails

Jamal invested $500 in an account that earns 8% interest annually. He wants to know how long it will take for his money to double.
Using the Rule of 72, about how many years will it take for Jamal's investment to double?

4 years

6 years

9 years

12 years

Luis wants a safe and convenient way to manage his everyday money. He needs an account that will let him deposit his paycheck, pay bills, use a debit card, and withdraw cash when needed.
Which type of account would best meet Luis’s needs?

Certificate of Deposit (CD)

Savings account

Investment account

Checking account

Olivia just started a new job. Her employer asks if she wants her paycheck sent straight to her bank account instead of receiving a paper check every payday.
What is the term for this method of payment?

Direct Deposit

Check  Deposit

Mobile Depost

Bank Deposit

Emma visits her bank to put some of her birthday money into her savings account. The teller completes the transaction and gives her a receipt showing the new balance.
What is the money Emma added to her account called?

deposit

withdrawal

endorsement

payment

Noah pays his electric bill online, and the money is automatically taken from his checking account and sent to the utility company.
What is this type of electronic payment called?

Wire transfer

deposit

Electronic funds transfer (EFT)

automatic deposit

Marco is deciding where to keep his money. He knows the FDIC protects deposits in banks, but he's not sure if all types of financial products are covered.
Which of the following is NOT insured by the FDIC?

Money Market and Checking accounts

Savings and Checking accounts

Stocks and mutual funds

Certificates of deposit (CDs) and Money Market accounts

Lena writes a check to pay her rent, but later finds out that the check was returned by the bank and she was charged a fee.
What is a common reason this could happen, also known as "bouncing" a check?

Too much money in account

Nonsufficient funds

Forgetting to sign the back of the check

Depositing the check too early

Hunter puts money into a savings account and notices that over time, he’s earning interest not just on the amount he originally deposited, but also on the interest that’s already been added to his account.
What is this type of interest called?

Simple Interest

Principal Interest

Compound Interest

Variable Interest

Ava receives a check for her birthday and wants to deposit it into her bank account. Before doing so, she signs her name on the back of the check.
What is this signature on the back of a check called?

Authorization

Endorsement

Verification

Approval

An emergency fund should consist of ____________________expenses.

6-12 months

3-6 months

1-2 months

2-3 months

One of the easiest ways to build short term wealth is to _________________________________. Which means having funds from your paycheck deposited in a short term savings account -before you pay any bills. After a few months, you won’t even know it's missing.

Pay yourself last

pay the bank

pay yourself first

have a checking account

FDIC will insure an account up to

$300,000

$100,000

$250,000

$150,000

A formula for computing how long it will take to double money invested at a given rate

compound interest

Rule of 72

maturity value

endorsement

A check that is not honored by a bank and is returned to the payee's bank due to non-sufficient funds

postdated check

bounced check

stop payment

money order

Which of the following is the most liquid?

money market funds account

savings account

certificate of deposit

savings bond

Brian didn't realize that he only had $58.42 in his checking account when he wrote a check to Target for $75.00. Brian's bank still honored the check because he had this service on his account. What is that service called?

Safe Deposit Protection

Interest Checking Service

Floating Service

Overdraft Protection

Which compound interest method would be the BEST for your savings account (give you the most money)?

Monthly

Daily

Quarterly

Semiannually

Jesse has $50,000 in his savings account. If Jesse's bank goes out of business, he knows his money is protected by which government agency?

Financial Industry Regulatory Authority (FIRA)

Federal Deposit Insurance Corporation (FDIC)

Internal Revenue Service (IRS)

Securities and Exchange Commission (SEC)

What savings plan NORMALLY pays the LOWEST interest rate?

A United States Savings Bond

A  Certificate of Deposit

A Money Market Account

A Savings Account

Kila decided to open a regular savings account instead of a certificate of deposit (CD) because she wanted easy access to her funds without a penalty. What is the name of this term that measures how quickly an asset can be turned into cash?

Endorsement

Compound Interest

Safety of Principal

Liquidity

Why should young people start saving their money early?

Interest rates are low.

They have time on their side to let their money grow.

The stock market is risky.

They might die soon.

Manny wrote a check for $50 but he only had $5 in his checking account. The bank REFUSED to cash the check since there was not enough money in the account to cover it. What is the name for this type of check?

NSF Check (Bounced Check)

Stale Check

Cashier's Check

Postdated Check

Marcus just opened a checking account and wants a convenient way to buy groceries and get cash from ATMs without carrying large amounts of cash.
Which type of card would allow Marcus to make purchases in stores and withdraw money directly from his checking account?

Debit card

Credit card

Prepaid card

Gift card

Samantha is worried that she might accidentally spend more money than she has in her checking account. Her bank offers overdraft protection, and she’s considering signing up.
What does overdraft protection help Samantha avoid?

Earning interest on her account

Paying monthly maintenance fees and ATM fees

Having her debit card declined due to insufficient funds

Paying Inactive account fees

Elena is choosing a bank and notices that one option is “FDIC insured.” She wants to make sure her money is safe if something happens to the bank.
What is the main purpose of a bank being insured by the Federal Deposit Insurance Corporation (FDIC)?

To protect customers' money up to $250,000 if the bank fails 

It insures a person's loans can be written off after a certain period of time.

It insures a person's bank assets against government deficits.

To protect customers' money up to $100,000 if the government fails

Jamal invested $500 in an account that earns 8% interest annually. He wants to know how long it will take for his money to double.
Using the Rule of 72, about how many years will it take for Jamal's investment to double?

4 years

6 years

9 years

12 years

Luis wants a safe and convenient way to manage his everyday money. He needs an account that will let him deposit his paycheck, pay bills, use a debit card, and withdraw cash when needed.
Which type of account would best meet Luis’s needs?

Certificate of Deposit (CD)

Savings account

Investment account

Checking account

Olivia just started a new job. Her employer asks if she wants her paycheck sent straight to her bank account instead of receiving a paper check every payday.
What is the term for this method of payment?

Direct Deposit

Check  Deposit

Mobile Depost

Bank Deposit

Emma visits her bank to put some of her birthday money into her savings account. The teller completes the transaction and gives her a receipt showing the new balance.
What is the money Emma added to her account called?

deposit

withdrawal

endorsement

payment

Noah pays his electric bill online, and the money is automatically taken from his checking account and sent to the utility company.
What is this type of electronic payment called?

Wire transfer

deposit

Electronic funds transfer (EFT)

automatic deposit

Marco is deciding where to keep his money. He knows the FDIC protects deposits in banks, but he's not sure if all types of financial products are covered.
Which of the following is NOT insured by the FDIC?

Money Market and Checking accounts

Savings and Checking accounts

Stocks and mutual funds

Certificates of deposit (CDs) and Money Market accounts

Lena writes a check to pay her rent, but later finds out that the check was returned by the bank and she was charged a fee.
What is a common reason this could happen, also known as "bouncing" a check?

Too much money in account

Nonsufficient funds

Forgetting to sign the back of the check

Depositing the check too early

Hunter puts money into a savings account and notices that over time, he’s earning interest not just on the amount he originally deposited, but also on the interest that’s already been added to his account.
What is this type of interest called?

Simple Interest

Principal Interest

Compound Interest

Variable Interest

Ava receives a check for her birthday and wants to deposit it into her bank account. Before doing so, she signs her name on the back of the check.
What is this signature on the back of a check called?

Authorization

Endorsement

Verification

Approval

An emergency fund should consist of ____________________expenses.

6-12 months

3-6 months

1-2 months

2-3 months

One of the easiest ways to build short term wealth is to _________________________________.  Which means having funds from your paycheck deposited in a short term savings account -before you pay any bills.  After a few months, you won’t even know it's missing.

Pay yourself last

pay the bank

pay yourself first

have a checking account

FDIC will insure an account up to

$300,000

$100,000

$250,000

$150,000

A formula for computing how long it will take to double money invested at a given rate

compound interest

Rule of 72

maturity value

endorsement

A check that is not honored by a bank and is returned to the payee's bank due to non-sufficient funds

postdated check

bounced check

stop payment

money order

Which of the following is the most liquid?

money market funds account

savings account

certificate of deposit

savings bond

Brian didn't realize that he only had $58.42 in his checking account when he wrote a check to Target for $75.00.  Brian's bank still honored the check because he had this service on his account. What is that service called?

Safe Deposit Protection

Interest Checking Service

Floating Service

Overdraft Protection

Which compound interest method would be the BEST for your savings account (give you the most money)?

Monthly

Daily

Quarterly

Semiannually

Jesse has $50,000 in his savings account.  If Jesse's bank goes out of business, he knows his money is protected by which government agency?

Financial Industry Regulatory Authority (FIRA)

Federal Deposit Insurance Corporation (FDIC)

Internal Revenue Service (IRS)

Securities and Exchange Commission (SEC)

What savings plan NORMALLY pays the LOWEST interest rate?

A United States Savings Bond

A  Certificate of Deposit

A Money Market Account

A Savings Account

Kila decided to open a regular savings account instead of a certificate of deposit (CD) because she wanted easy access to her funds without a penalty.  What is the name of this term that measures how quickly an asset can be turned into cash?

Endorsement

Compound Interest

Safety of Principal

Liquidity

Why should young people start saving their money early?

Interest rates are low.

They have time on their side to let their money grow.

The stock market is risky.

They might die soon.

Manny wrote a check for $50 but he only had $5 in his checking account. The bank REFUSED to cash the check since there was not enough money in the account to cover it.  What is the name for this type of check?

NSF Check (Bounced Check)

Stale Check

Cashier's Check

Postdated Check

Copy of PF Unit 2 Banking Review (5/21/2025)

Copy of PF Unit 2 Banking Review (5/21/2025)

Marcus just opened a checking account and wants a convenient way to buy groceries and get cash from ATMs without carrying large amounts of cash.Which type of card would allow Marcus to make purchases in stores and withdraw money directly from his checking account?

Samantha is worried that she might accidentally spend more money than she has in her checking account. Her bank offers overdraft protection, and she’s considering signing up.What does overdraft protection help Samantha avoid?

Elena is choosing a bank and notices that one option is “FDIC insured.” She wants to make sure her money is safe if something happens to the bank.What is the main purpose of a bank being insured by the Federal Deposit Insurance Corporation (FDIC)?

Jamal invested $500 in an account that earns 8% interest annually. He wants to know how long it will take for his money to double.Using the Rule of 72, about how many years will it take for Jamal's investment to double?

Luis wants a safe and convenient way to manage his everyday money. He needs an account that will let him deposit his paycheck, pay bills, use a debit card, and withdraw cash when needed.Which type of account would best meet Luis’s needs?

Olivia just started a new job. Her employer asks if she wants her paycheck sent straight to her bank account instead of receiving a paper check every payday.What is the term for this method of payment?

Emma visits her bank to put some of her birthday money into her savings account. The teller completes the transaction and gives her a receipt showing the new balance.What is the money Emma added to her account called?

Noah pays his electric bill online, and the money is automatically taken from his checking account and sent to the utility company.What is this type of electronic payment called?

Marco is deciding where to keep his money. He knows the FDIC protects deposits in banks, but he's not sure if all types of financial products are covered.Which of the following is NOT insured by the FDIC?

Lena writes a check to pay her rent, but later finds out that the check was returned by the bank and she was charged a fee.What is a common reason this could happen, also known as "bouncing" a check?

Hunter puts money into a savings account and notices that over time, he’s earning interest not just on the amount he originally deposited, but also on the interest that’s already been added to his account.What is this type of interest called?

Ava receives a check for her birthday and wants to deposit it into her bank account. Before doing so, she signs her name on the back of the check.What is this signature on the back of a check called?

An emergency fund should consist of ____________________expenses.

One of the easiest ways to build short term wealth is to _________________________________. Which means having funds from your paycheck deposited in a short term savings account -before you pay any bills. After a few months, you won’t even know it's missing.

FDIC will insure an account up to

A formula for computing how long it will take to double money invested at a given rate

A check that is not honored by a bank and is returned to the payee's bank due to non-sufficient funds

Which of the following is the most liquid?

Brian didn't realize that he only had $58.42 in his checking account when he wrote a check to Target for $75.00. Brian's bank still honored the check because he had this service on his account. What is that service called?

Which compound interest method would be the BEST for your savings account (give you the most money)?

Jesse has $50,000 in his savings account. If Jesse's bank goes out of business, he knows his money is protected by which government agency?

What savings plan NORMALLY pays the LOWEST interest rate?

Kila decided to open a regular savings account instead of a certificate of deposit (CD) because she wanted easy access to her funds without a penalty. What is the name of this term that measures how quickly an asset can be turned into cash?

Why should young people start saving their money early?

Manny wrote a check for $50 but he only had $5 in his checking account. The bank REFUSED to cash the check since there was not enough money in the account to cover it. What is the name for this type of check?

Marcus just opened a checking account and wants a convenient way to buy groceries and get cash from ATMs without carrying large amounts of cash.
Which type of card would allow Marcus to make purchases in stores and withdraw money directly from his checking account?

Samantha is worried that she might accidentally spend more money than she has in her checking account. Her bank offers overdraft protection, and she’s considering signing up.
What does overdraft protection help Samantha avoid?

Elena is choosing a bank and notices that one option is “FDIC insured.” She wants to make sure her money is safe if something happens to the bank.
What is the main purpose of a bank being insured by the Federal Deposit Insurance Corporation (FDIC)?

Jamal invested $500 in an account that earns 8% interest annually. He wants to know how long it will take for his money to double.
Using the Rule of 72, about how many years will it take for Jamal's investment to double?

Luis wants a safe and convenient way to manage his everyday money. He needs an account that will let him deposit his paycheck, pay bills, use a debit card, and withdraw cash when needed.
Which type of account would best meet Luis’s needs?

Olivia just started a new job. Her employer asks if she wants her paycheck sent straight to her bank account instead of receiving a paper check every payday.
What is the term for this method of payment?

Emma visits her bank to put some of her birthday money into her savings account. The teller completes the transaction and gives her a receipt showing the new balance.
What is the money Emma added to her account called?

Noah pays his electric bill online, and the money is automatically taken from his checking account and sent to the utility company.
What is this type of electronic payment called?

Marco is deciding where to keep his money. He knows the FDIC protects deposits in banks, but he's not sure if all types of financial products are covered.
Which of the following is NOT insured by the FDIC?

Lena writes a check to pay her rent, but later finds out that the check was returned by the bank and she was charged a fee.
What is a common reason this could happen, also known as "bouncing" a check?

Hunter puts money into a savings account and notices that over time, he’s earning interest not just on the amount he originally deposited, but also on the interest that’s already been added to his account.
What is this type of interest called?

Ava receives a check for her birthday and wants to deposit it into her bank account. Before doing so, she signs her name on the back of the check.
What is this signature on the back of a check called?