BAF 101 Test 2
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
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| provides safe storage of funds for future use; referred to as time deposits | savings
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| offer an ability to transfer money to others for daily business activities; checking accounts are often called demand deposits | payment services
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| credit alternatives: credit cards and cash loans, long-term borrowing (home mortgage) | borrowing
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| legal agreement that provides for the management of assets by one party for the benefit of another | trust
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| cash management account; provides a complete financial services program for a single fee; offered by investment companies | asset management account
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| a computer terminal used to conduct banking transactions | ATM
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| a plastic access card used in computerized banking transactions; cash card; spending your own funds | debit card
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| What to consider when comparing financial Institutions? | safety and rates, convenience and service (the cost of both), earnings you will receive on accounts
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| serve as intermediaries between savers and users of funds; most common types: banks, credit unions, savings and loan | deposit institutions
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| Where do the profits of a mutual savings bank go? | to the depositors through higher rates on savings
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| offer various financial services such as life insurance companies, investment companies, brokerage firms, etc. | nondeposit institutions
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| a savings-investment plan offered by investment companies, with earnings based on investments | money market fund
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| make loans based on the value of tangible possessions, like jewelry; charge high fees | pawnshops
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| currency exchanges; offer services like electronic tax filing, money orders, private postal boxes, utility bill payment; charge 1-20% of face value of a check | check cashing outlets
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| cash advances, check advance loans, delayed deposit loans; users of these loans are workers in debt; borrowers pay annual interest rate 780% to obtain needed cash | payday loans
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| stores that lease products to consumers who can own the item if they complete a certain number of monthly payments | rent-to-own centers
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| involve a low or no minimum balance and allow you to withdraw money as needed; called share accounts at credit unions; offered at many financial institutions | regular savings accounts
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| a savings plan requiring that a certain amount be left on deposit for a states time period to earn a specified interest rate | certificate of deposit
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| usually pay a low interest rate; checking accounts having a savings feature | interest-earning checking accounts
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| savings account offered by banks, savings and loan, and credit unions that requires a minimum balance and has earnings based on market interest rates | money market account
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| purchased at face value; increase in value every month as interest accrues monthly and compounds semiannually | EE bonds
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| current income bonds; earn interest every six months, which is deposited electronically to bank account; taxed as current income; popular source of retirement income | HH Bonds
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| earns a combined rate consisting of a fixed rate for the life of the bond and an inflation rate that changes twice a year | I bonds
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| a process that calculates interest based on previously earned interest | compounding
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| as this rate increases, the interest rate offered to savers also increase; the rate of return you earn on your savings should be compared with this | inflation
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| reduce interest earned on savings | taxes
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| allows you to withdraw your money on short notice without a loss of value or fees | liquidity
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Created by:
cgb1993
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