Wk 5: Unit 2 TEST

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Emily needs a bank account that allows her to easily access her money for daily transactions, such as paying bills and making purchases. She doesn’t need to earn a high interest rate but values the ability to access her funds without restrictions. Which of the following account types would best meet her needs?

High-Yield Savings Account

Money Market Account

Checking Account

Certificate of Deposit (CD)

Which of the following is an effective strategy for personal saving?

Setting a specific savings goal and automatically transferring a portion of income into a savings account each month

Keeping all savings in a checking account for easy access

Spending all available income and saving any leftover money

Avoiding the use of a budget and saving only when there is an excess of funds

You’ve misplaced a check that a friend gave you as payment. What is the most appropriate initial action to take?

Call the bank to see if they can trace the check’s whereabouts

Contact your friend to let them know the check is lost and request that they stop payment on it and issue a new one

Visit the bank to ask if the check can be canceled and if you can get a refund

Wait for the check to potentially be cashed and hope for the best

All of the following statements about bank accounts are true EXCEPT:

A savings account generally provides higher interest rates than a checking account but may have limited transaction capabilities.

Money market accounts usually offer the highest interest rates and come with no transaction limitations.

A Certificate of Deposit (CD) usually offers higher interest rates but requires funds to be locked away for a set period.

A checking account typically allows for unlimited transactions and provides easy access to funds.

All of the following are true about prepaid cards EXCEPT…

Prepaid cards can be used at any retailer that accepts the card network (e.g., Visa or Mastercard).

Prepaid cards often come with fees for activation, reloading, and transactions.

Prepaid cards require a credit check before they can be issued.

Prepaid cards can be used to make purchases up to the amount loaded onto the card.

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term?

Save for a meal out, save for a new car, save for retirement

Save for a movie ticket, save for a home renovation, save for a child’s education

Save for a new smartphone, save for a vacation, save for a down payment on a house

Save for a coffee maker, save for a major appliance, save for a luxury car

Using the 50-30-20 rule of budgeting, which of the following correctly allocates your monthly income?

50% for savings, 30% for debt repayment, 20% for groceries

50% for needs, 30% for wants, 20% for savings and debt repayment

50% for transportation, 30% for dining out, 20% for rent

50% for entertainment, 30% for utilities, 20% for savings

When is the most advantageous time to begin contributing to a retirement account?

As early as possible, even if you can only contribute a small amount

When you have reached your peak earning years

Only when you receive a substantial bonus or windfall

After you have paid off all your current debts

Which of the following accurately reflects the current state of financial readiness among most Americans?

Most Americans are neither sufficiently prepared for emergencies nor have enough saved for retirement.

Most Americans have managed to build an adequate emergency fund but fall short on retirement savings.

Most Americans are well-prepared for retirement but lack an adequate emergency fund.

Most Americans have both an adequate emergency fund and ample savings for retirement.

According to financial experts, how many months’ worth of expenses should you aim to have in your emergency fund?

12 to 18 months

6 to 12 months

1 to 2 months

3 to 6 months

Digital wallets and P2P payments have made the use of __________ less necessary.

cash

checks

debit cards

credit cards

Three of these statements best describe a checking account. Which statement best describes a savings account?

Provides easy access to funds with no limit on the number of transactions.

Offers higher interest rates and is typically used for setting aside money for future needs.

Generally used for managing everyday transactions and paying bills.

Allows for frequent deposits and withdrawals, usually comes with a debit card.

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

They have a substantial amount of savings set aside for future expenses.

They are consistently able to invest their surplus income in various financial assets.

They have enough income to cover their expenses but no extra money for savings or emergencies.

They are able to save a significant portion of their income each month.

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

A loan taken out from the bank

Your savings account balance

A credit line provided by the bank

Your checking account balance

If inflation is higher than the interest rate on your savings account, what is the likely impact on your purchasing power?

Your purchasing power will increase because your savings grow faster than inflation.

Your purchasing power will decrease because inflation erodes the value of your savings.

Your purchasing power will fluctuate depending on changes in the interest rate.

Your purchasing power will remain the same as the interest rate matches inflation.

Taylor notices a $50 fee on her bank statement that she does not recognize. What is the best course of action for her to take?

Contact her bank to inquire about the fee and seek clarification or a possible reversal.

Ignore the fee and focus on managing other transactions.

Wait until the end of the month to see if the fee is adjusted automatically.

Immediately withdraw all her money from the bank to avoid further fees.

Which of the following transactions will REDUCE your checking account balance immediately?

Transferring funds from your savings account to your checking account

Writing a check to pay for a utility bill

Receiving a direct deposit from an employer

Depositing a paycheck into your account

Which of the following statements is an advantage of online banking?

It eliminates the need for electronic statements and online security measures.

It requires physical visits to the bank for all transactions.

It typically involves higher fees compared to traditional banking methods.

It provides 24/7 access to your account from anywhere with an internet connection.

Which of the following accurately describes FDIC Insurance?

 A service that banks offer for an additional fee to protect customers' deposits from loss.

A type of insurance that banks purchase to cover their operational losses and fraud.

A federal protection program guaranteeing up to $250,000 of a customer’s deposits per bank if the bank fails.

A requirement for customers to access online banking features or mobile banking apps.

When signing up for a new checking account, you answer "Yes" to receive overdraft coverage. On this day, you have $10 in your account and use your debit card to buy lunch for $12, a movie ticket for $12, and dinner for $15. What is likely to be the outcome resulting from these transactions?

The bank will apply a temporary credit to your account, and you will be charged an additional fee for each transaction.

The bank will automatically transfer funds from your savings account to cover the transactions.

All transactions will be declined because you have insufficient funds.

The bank will cover the transactions, but you will incur overdraft fees for each purchase.

How frequently do banks generally provide statements for checking accounts to their customers?

Every 14 days

Once per calendar month

Every 180 days

Annually

All of the following are ways banks contribute to the economy, EXCEPT:

Collecting and storing physical cash for extended periods without using it

Providing loans to individuals and businesses to support economic growth

Facilitating financial transactions and payments between consumers and businesses

Offering savings accounts that help individuals save money for the future

A person-to-person payment app could be used in each of the following scenarios EXCEPT:

Splitting the cost of a dinner bill with friends

Sending a gift of money to a family member for a special occasion

Paying for a subscription service that automatically renews monthly

Reimbursing a colleague for a shared expense like office supplies

What does direct deposit generally involve?

Depositing cash directly into a bank account at an ATM.

Your employer or payer sending your funds electronically into your bank account.

Receiving a physical paycheck that you need to deposit manually at the bank.

Writing and depositing checks to transfer funds between bank accounts.

All of the following are downsides of being unbanked EXCEPT:

Limited access to financial services such as loans and credit cards

Increased reliance on check-cashing services, which often come with high fees

Higher risk of carrying and handling large amounts of cash, which can be unsafe

Having more access to credit-building opportunities and financial education

Emily needs a bank account that allows her to easily access her money for daily transactions, such as paying bills and making purchases. She doesn’t need to earn a high interest rate but values the ability to access her funds without restrictions. Which of the following account types would best meet her needs?

High-Yield Savings Account

Money Market Account

Checking Account

Certificate of Deposit (CD)

Which of the following is an effective strategy for personal saving?

Setting a specific savings goal and automatically transferring a portion of income into a savings account each month

Keeping all savings in a checking account for easy access

Spending all available income and saving any leftover money

Avoiding the use of a budget and saving only when there is an excess of funds

You’ve misplaced a check that a friend gave you as payment. What is the most appropriate initial action to take?

Call the bank to see if they can trace the check’s whereabouts

Contact your friend to let them know the check is lost and request that they stop payment on it and issue a new one

Visit the bank to ask if the check can be canceled and if you can get a refund

Wait for the check to potentially be cashed and hope for the best

All of the following statements about bank accounts are true EXCEPT:

A savings account generally provides higher interest rates than a checking account but may have limited transaction capabilities.

Money market accounts usually offer the highest interest rates and come with no transaction limitations.

A Certificate of Deposit (CD) usually offers higher interest rates but requires funds to be locked away for a set period.

A checking account typically allows for unlimited transactions and provides easy access to funds.

All of the following are true about prepaid cards EXCEPT…

Prepaid cards can be used at any retailer that accepts the card network (e.g., Visa or Mastercard).

Prepaid cards often come with fees for activation, reloading, and transactions.

Prepaid cards require a credit check before they can be issued.

Prepaid cards can be used to make purchases up to the amount loaded onto the card.

You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term?

Save for a meal out, save for a new car, save for retirement

Save for a movie ticket, save for a home renovation, save for a child’s education

Save for a new smartphone, save for a vacation, save for a down payment on a house

Save for a coffee maker, save for a major appliance, save for a luxury car

Using the 50-30-20 rule of budgeting, which of the following correctly allocates your monthly income?

50% for savings, 30% for debt repayment, 20% for groceries

50% for needs, 30% for wants, 20% for savings and debt repayment

50% for transportation, 30% for dining out, 20% for rent

50% for entertainment, 30% for utilities, 20% for savings

When is the most advantageous time to begin contributing to a retirement account?

As early as possible, even if you can only contribute a small amount

When you have reached your peak earning years

Only when you receive a substantial bonus or windfall

After you have paid off all your current debts

Which of the following accurately reflects the current state of financial readiness among most Americans?

Most Americans are neither sufficiently prepared for emergencies nor have enough saved for retirement.

Most Americans have managed to build an adequate emergency fund but fall short on retirement savings.

Most Americans are well-prepared for retirement but lack an adequate emergency fund.

Most Americans have both an adequate emergency fund and ample savings for retirement.

According to financial experts, how many months’ worth of expenses should you aim to have in your emergency fund?

12 to 18 months

6 to 12 months

1 to 2 months

3 to 6 months

Digital wallets and P2P payments have made the use of __________ less necessary.

cash

checks

debit cards

credit cards

Three of these statements best describe a checking account. Which statement best describes a savings account?

Provides easy access to funds with no limit on the number of transactions.

Offers higher interest rates and is typically used for setting aside money for future needs.

Generally used for managing everyday transactions and paying bills.

Allows for frequent deposits and withdrawals, usually comes with a debit card.

You overhear your Aunt Tina tell your mom that she, her husband, and their kids are "living paycheck to paycheck." What does Aunt Tina mean by that?

They have a substantial amount of savings set aside for future expenses.

They are consistently able to invest their surplus income in various financial assets.

They have enough income to cover their expenses but no extra money for savings or emergencies.

They are able to save a significant portion of their income each month.

You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

A loan taken out from the bank

Your savings account balance

A credit line provided by the bank

Your checking account balance

If inflation is higher than the interest rate on your savings account, what is the likely impact on your purchasing power?

Your purchasing power will increase because your savings grow faster than inflation.

Your purchasing power will decrease because inflation erodes the value of your savings.

Your purchasing power will fluctuate depending on changes in the interest rate.

Your purchasing power will remain the same as the interest rate matches inflation.

Taylor notices a $50 fee on her bank statement that she does not recognize. What is the best course of action for her to take?

Contact her bank to inquire about the fee and seek clarification or a possible reversal.

Ignore the fee and focus on managing other transactions.

Wait until the end of the month to see if the fee is adjusted automatically.

Immediately withdraw all her money from the bank to avoid further fees.

Which of the following transactions will REDUCE your checking account balance immediately?

Transferring funds from your savings account to your checking account

Writing a check to pay for a utility bill

Receiving a direct deposit from an employer

Depositing a paycheck into your account

Which of the following statements is an advantage of online banking?

It eliminates the need for electronic statements and online security measures.

It requires physical visits to the bank for all transactions.

It typically involves higher fees compared to traditional banking methods.

It provides 24/7 access to your account from anywhere with an internet connection.

Which of the following accurately describes FDIC Insurance?

 A service that banks offer for an additional fee to protect customers' deposits from loss.

A type of insurance that banks purchase to cover their operational losses and fraud.

A federal protection program guaranteeing up to $250,000 of a customer’s deposits per bank if the bank fails.

A requirement for customers to access online banking features or mobile banking apps.

When signing up for a new checking account, you answer "Yes" to receive overdraft coverage. On this day, you have $10 in your account and use your debit card to buy lunch for $12, a movie ticket for $12, and dinner for $15. What is likely to be the outcome resulting from these transactions?

The bank will apply a temporary credit to your account, and you will be charged an additional fee for each transaction.

The bank will automatically transfer funds from your savings account to cover the transactions.

All transactions will be declined because you have insufficient funds.

The bank will cover the transactions, but you will incur overdraft fees for each purchase.

How frequently do banks generally provide statements for checking accounts to their customers?

Every 14 days

Once per calendar month

Every 180 days

Annually

All of the following are ways banks contribute to the economy, EXCEPT:

Collecting and storing physical cash for extended periods without using it

Providing loans to individuals and businesses to support economic growth

Facilitating financial transactions and payments between consumers and businesses

Offering savings accounts that help individuals save money for the future

A person-to-person payment app could be used in each of the following scenarios EXCEPT:

Splitting the cost of a dinner bill with friends

Sending a gift of money to a family member for a special occasion

Paying for a subscription service that automatically renews monthly

Reimbursing a colleague for a shared expense like office supplies

What does direct deposit generally involve?

Depositing cash directly into a bank account at an ATM.

Your employer or payer sending your funds electronically into your bank account.

Receiving a physical paycheck that you need to deposit manually at the bank.

Writing and depositing checks to transfer funds between bank accounts.

All of the following are downsides of being unbanked EXCEPT:

Limited access to financial services such as loans and credit cards

Increased reliance on check-cashing services, which often come with high fees

Higher risk of carrying and handling large amounts of cash, which can be unsafe

Having more access to credit-building opportunities and financial education