Sie sind auf Seite 1von 13

1. Most banks offer essentially the same types of accounts.

a. True b. False

2. A transaction account allows transactions to occur at any time and in any number.
a. True b. False

3. Basic checking accounts always pay interest on the balance deposited in the account.
a. True b. False

4. Banks may require up to a seven-day notice from a depositor who wants to withdraw money from a time
deposit.
a. True b. False

5. You cannot get your money from a certificate of deposit before the maturity date.
a. True b. False

6. Principal is the price paid for using money.


a. True b. False

7. Compound interest uses the same principal amount every time it is calculated.
a. True b. False

8. Money doesn’t just mean currency, but also checks, ledger transfers, and even credit.
a. True b. False

9. In the United States, the government plays the greatest role in determining how money is moving.
a. True b. False

10. Banks are free to change governing documents, but they must give customers written notice of changes.
a. True b. False

11. A joint tenancy checking account allows each owner to make deposits and withdrawals independently.
a. True b. False

12. The most common form of a transaction account is a


a. savings account. c. money market account.
b. checking account. d. certificate of deposit.

13. What term best describes companies obtaining financing directly from capital markets (without
using banks for financing)?
a. rate chasers c. Check 21
b. interbank transactions d. disintermediation of funds
14. Which of the following is NOT a time deposit?
a. savings account c. money market account
b. checking account d. certificate of deposit

15. Which of the following accounts are you LEAST likely to encounter at a modern bank?
a. checking account c. money market account
b. certificate of deposit d. passbook savings account

16. Which of the following accounts is the MOST liquid?


a. money market account c. checking account
b. certificate of deposit d. savings account

17. Adding interest to the principal and paying interest on the new total is called paying ……….
a. compound interest. c. semiannual interest.
b. simple interest. d. total interest.

18. For the purposes of computing interest compounded daily, a year is generally considered to be ……
a. 336 days. c. 365 days.
b. 360 days. d. 366 days.

19. Which of the following statements about reserve requirements is true?


a. Reserve requirements apply to the M1 and M2 money supply.
b. Reserve requirements are the most important factor in bank lending.
c. Reserve requirements do not change very often.
d. If reserve requirements are low, banks must keep back more money and therefore have less to lend.

20. Which of the following governing documents list interest rates in effect at the time for various types of
accounts?
a. disclosure statements c. fee schedules
b. account rules d. deposit rate schedules

21. A check that is dated six months or more before it is presented for payment or deposit is called a(n)………
a. stale check. c. bounced check.
b. postdated check. d. overdraft check.

22. This Federal Reserve regulation requires banks to maintain adequate reserves for the funds they have on
deposit.
a. Regulation C c. Regulation D
b. Regulation CC d. Regulation DD

23. Basic checking accounts offer a few simple services for minimal cost.

24. All deposits to cover transactions that make automatic withdrawals or transfers to pay bills without
writing checks are called checkable deposits.
25. A statement savings account provides a monthly or quarterly report detailing all account activity.

26. A passbook savings account provides a ledger of activity that a teller updates when a customer
makes deposits or withdrawals.

27. The date on which a certificate of deposit is paid is called the maturity date.

28. A(n) share certificate is equivalent to a certificate of deposit, except it is offered by a credit union
rather than a bank.

29. The beginning amount used to calculate interest is called principal.

30. Compound interest adds interest to the principal and pays interest on the new total.

31. Banks make and receive deposits to each other in interbank transactions.

32. Consumers who perpetually move their funds among various accounts to obtain the highest interest
rates at any point in time are called rate chasers.

33. A joint checking account has two or more owners, each of whom has equal and independent access
to it.

34. Natasha’s checking account charges a basic monthly fee of $5. It allows her to write ten checks each
month for free; it charges her $2 for every additional check she writes. The account also charges
Natasha $1 each time she uses an ATM machine. What total fees did Natasha pay in April if she wrote 17
checks and used the ATM machine six times? $25

35. Theo wrote 132 checks last year. How many checks did he write every month, on average? 11

36. Calculate the simple interest earned on a savings account in nine months that begins with a deposit of
$500 and pays 3 percent interest. $11.25

37. Augie’s savings account pays simple interest. He began with a deposit of $2,000; at the end of one year, he
had earned $80 in interest. Find the interest rate on the account. 4%

38. Keri’s savings account pays simple interest at a rate of 4.5 percent. After nine months, the account had
earned $202.50 in interest. Find the principal. $6,000

39. Calculate the simple interest earned on a savings account in six months that begins with a deposit of
$5,000 and pays 6 percent interest. $150

40. What is a demand deposit?


A demand deposit is a deposit account that is payable on demand whenever the depositor chooses.

41. How do the total funds in transaction accounts affect the money supply?
The total funds in transaction accounts affect the money supply because of their high liquidity.
42. What is the basic formula for calculating simple interest?
The basic formula for calculating simple interest is Principal × Rate × Time.

43. What is a certificate of deposit?


A certificate of deposit is a certificate offered by a bank that guarantees payment of a specified interest rate
until a designated date in the future.

44. In general, what determines the money supply?


The money supply is determined by the supply and demand for credit.

45. What are disclosure statements?


Disclosure statements provide bank customers full information about bank policies. They are required by law.

46. Describe the benefits of an express checking account. What are some disadvantages?
Benefits of an express checking account include unlimited check writing, low minimum balance requirements,
and low or no monthly fees. However, such accounts often charge high teller fees.

47. Compare and contrast savings accounts and money market deposit accounts.
Savings accounts are among the safest places to put money. Liquidity is high, but interest income is relatively
low. A money market deposit account offers a higher rate of interest than a savings account, but it will typically
require a higher initial deposit to open. In addition, minimum balances to avoid fees are also higher, and
liquidity is not as great as with a savings account.

48. Explain the difference between APR and APY.


APR stands for annual percentage rate; it is the nominal rate on which interest is calculated per year. APY
stands for annual percentage yield; it represents the effect of compounding. APY varies according to the APR
and the frequency of compounding.

49. Describe how the Federal Reserve can put more money into the economy through its open market
operations.
The Fed buys U.S. government securities on the open market. The Fed buys these securities by creating new
money, which the sellers of the securities deposit in financial institutions. Thus, deposits flow from the Fed’s
pool of new money directly into bank accounts, providing banks more money to lend. The money supply
expands as a result of the multiplier effect.

50. Name three things a bank must do to meet the requirements of Federal Reserve Regulation CC.
To meet the requirements of Regulation CC, a bank must (1) provide consumers who have transaction
accounts, such as a checking account, with disclosures stating when their funds will be available for
withdrawal; (2) post a notice of the bank’s availability policy pertaining to consumer accounts; and (3) include
a notice of funds availability on the front of all preprinted deposit slips.
1. Personal loans do not require the borrower to state a specific purpose for the funds.
a. True b. False

2. Secured loans are sometimes called signature loans.


a. True b. False

3. Balance sheets for all banks are private documents seen only by bank management.
a. True b. False

4. The three general categories of loans are consumer loans, commercial loans, and mortgage loans.
a. True b. False

5. Subprime rates are higher-than-normal interest rates offered to a less-than-perfect credit applicant.
a. True b. False

6. If a credit applicant has opened many new accounts recently, that is probably a sign that the
applicant is very creditworthy.
a. True b. False

7. Paying off a loan early saves the consumer no money if the sum-of-digits method has been used to compute
finance charges.
a. True b. False

8. One consequence of credit overextension is a ruined credit rating.


a. True b. False

9. High consumer debt is good for banks, because banks make most of their money from the interest paid on
loans.
a. True b. False

10. The term moral hazard means that consumers with poor moral character are a high credit risk.
a. True b. False

11. Keeping large amounts of currency on hand as protection against possible increases in
customers’demand for withdrawals reduces a bank’s ability to make profits from loans.
a. True b. False

12. A lending policy is a written statement of the guidelines and standards a bank must follow in making credit
decisions.
a. True b. False

13. All of the following are considered installment loans except


a. automobile loans. c. education loans.
b. home equity loans. d. lines of credit.

14. A legal claim a lender has on property to secure a debt is called


a. a lien. c. an acceleration clause.
b. collateral. d. a garnishment.

15. Which of the following is NOT an example of an account service fee?


a. certified check fee b. fee for returned checks
c. financing fee d. verbal funds transfer fee

16. Which of the following statements about open-end loans is true?


a. An automobile loan is probably the most common type of open-end loan.
b. The longer you use the money, the more you pay.
c. The amount owed is fixed.
d. The term is fixed.

17. Which of the following shows the steps of the credit-approval process in proper order?
a. underwriting, application, documentation, processing, closing, funding
b. documentation, application, underwriting, closing, processing, funding
c. application, processing, documentation, underwriting, closing, funding
d. application, documentation, processing, underwriting, closing, funding

18. Which of the following elements of the FICO credit-scoring system carries the most weight?
a. types of credit c. length of credit history
b. payment history d. new credit

19. This finance charge method takes the total finance charge, divides it by the number of months in the
loan term, and assigns a higher ratio of interest to the early payments.
a. previous balance method c. sum-of-digits method
b. average daily balance method d. adjusted balance method

20. Documentation of most credit problems stays in a consumer’s file for at least
a. six months. c. five years.
b. one year. d. seven years.

21. The concept that the borrowers who are most willing to accept a high interest rate are the same
borrowers who are most likely to default on their loans is called
a. moral hazard. c. adverse selection.
b. captive borrowers. d. asset transformation.

22. The risk that a bank will have to sell its assets at a loss to meet its cash demands is called
a. credit risk. c. liquidity risk.
b. market risk. d. security risk.

23. A(n) installment loan is a loan for which the amount of the payments, the rate of interest, and the
number of payments are fixed.

24. A home equity loan is essentially a second mortgage .

25. When banks refuse to provide a loan, or when they lend less than the customer requested, they are
engaging in credit rationing .

26. The amount you borrow in a loan is called the principal .

27. A(n) grace period is an amount of time you have to pay a credit card bill in full and avoid any
finance charges.

28. The process of reviewing a loan for soundness is called underwriting .


29. Inquiries are records of all who have requested a copy of a credit report within the last year.
30. The annual percentage rate is the amount of interest charge on a loan principal expressed as a yearly
figure.

31. Services provided by banks that generate revenue but that are not included on their balance sheets are
called off-balance sheet activities .

32. Asset transformation refers to using deposits to generate revenue by putting deposits to work via
loans.

33. Specific property that secures a loan is called collateral_.

34. Suppose you borrow $1,000 and pay the loan back in 12 equal payments of $95.50. What is the finance
charge for this loan? $146

35. Suppose you borrow $5,000 and make 12 equal payments to retire the debt. If the finance charge for
the loan is $400, what will the amount of each monthly payment be? $450

36. Becky has a balance of $2,000 on her credit card. The minimum payment requirement is 4%. How
much is the minimum payment? $80.00

37. Markita has a balance of $3,400 on her credit card. The minimum payment requirement is 5%, and the
card's APR is 17%. If she makes the minimum payment, how much of it will go toward paying the
interest? Round your answer to the nearest hundredth. $48.16

38. Dominic has a balance of $1,460.20 on his credit card. The minimum payment requirement is 6%, and
the card's APR is 18%. If he makes the minimum payment, how much of it will go toward reducing the
balance? Round your answer to the nearest hundredth. $66.31

39. What are home equity loans based upon?


Home equity loans are based upon the difference between what a home is worth and how much the
homeowner owes on a first mortgage.

40. What is a finance charge?


A finance charge is the total dollar amount to be paid for a loan.

41. What is an acceleration clause?


An acceleration clause brings the entire amount of a loan due if payments are missed.

42. What occurs during a loan closing?


During a loan closing, a bank representative discusses and explains the terms of the loan and the
borrower signs the documentation that has been prepared.

43. What is a consumer reporting agency?


A consumer reporting agency is a company that compiles and keeps records on consumer payment habits
and sells these reports to banks and other companies to use for evaluating creditworthiness.

44. What does securitization mean?


Securitization occurs when individual loans are pooled together and then sold as securities.
45. How can a bank limit credit risk?
A bank can limit credit risk by carefully screening loan applicants, setting and applying loan policies,
and monitoring outstanding loans.

46. Explain the difference between secured and unsecured loans.


Secured loans are loans in which some item of value backs the loan in case the borrower defaults on
the loan. An unsecured loan is backed only by the reputation and creditworthiness of the borrower.

47. What is a line of credit?


A line of credit is a type of open-end loan that allows consumers to establish a certain sum that they
may draw on as needs arise. Borrowing may be for any amount up to an agreed-upon limit. As the
balance is paid down, more money may be borrowed.

48. What are the “three Cs” that underwriters use to evaluate loan applications? Briefly define
them.
The “three Cs” are collateral, capacity, and credit reputation. Collateral refers to the security required
for the loan. Capacity refers to the ability to repay the loan, based on income, job history, and amount
currently owed. Credit reputation, or credit history, is a record of how well the applicant has repaid
debt in the past.

49. For a bank, what is liquidity? What are some loan factors that affect a lending bank’s
liquidity?
For a bank, liquidity means having the funds to meet its obligations when required. Loan factors
affecting a lending bank’s liquidity include loan terms (short-term loans produce profit more quickly
than long-term loans), interest rate (higher rates produce more profit), loan type (interest on
consumer loans is usually paid monthly, whereas some business loans are paid only once a year), and
collateral.

50. Explain what it means to be a captive borrower.


This describes how some segments of borrowers are more likely to prefer one type of lender to another.
For example, if a car company has a lower loan qualification standard than a bank, then a consumer with
a relatively weak credit history might opt for auto financing from the car company. Because it is easier
for a consumer with a weak credit history to obtain a loan from the car company, that consumer is a
captive borrower relative to the car financing company.
1. The most common form of negotiable instrument is a promissory note.
a. True b. False

2. Check use in the United States is beginning to decline.


a. True b. False

3. A check must be written on paper in order to be legal.


a. True b. False

4. A check cannot be negotiated until it has been endorsed.


a. True b. False

5. A full endorsement limits both the transferability and the further negotiability of a check.
a. True b. False

6. It is illegal for a bank to make different check-cashing rules for customers and noncustomers.
a. True b. False

7. The Federal Reserve clears about 90 percent of the checks written in the U.S.
a. True b. False

8. You must pay off your credit card account in full at the end of every month.
a. True b. False

9. Transit numbers are not issued to financial institutions that hold accounts at a Federal Reserve Bank.
a. True b. False

10. Under some circumstances, it is legal to write a postdated check.


a. True b. False

11. Which of the following features of a check indicates who is to receive the funds?
a. the bearer c. the payee
b. the signature d. the memo

12. The person who signs a draft is the


a. drawee. c. payee.
b. drawer. d. bearer.

13. Which of the following is NOT an element of negotiability?


a. must contain a signature b. must be written
c. must be payable on demand d. must state the amount to be paid

14. The term negotiation, as it applies to a negotiable instrument, applies to ……..


a. the ability of the holder to obtain its value. c. the terms of the instrument.
b. the conditions of the instrument. d. all of the above.

15. Which of the following endorsements is the least secure?


a. qualified endorsement c. restrictive endorsement
b. full endorsement d. blank endorsement

16. Which of the following is an example of a restrictive endorsement?


a. “For Deposit Only” d. “Pay to the Order of Jill Davies, without
b. the signature of the holder recourse”
c. “Pay to the Order of Tevin Washington”

17. Which of the following largely eliminated the wide variation of legal regulation from the country’s
payments system?
a. Federal Reserve Act of 1913 c. National Banking Act of 1864
b. Uniform Commercial Code of 1958 d. Expedited Funds Availability Act of 1987

18. Which of the following directly transfers money from a person’s account to the account of a retailer?
a. charge card c. debit card
b. credit card d. cash card

19. The 9-digit number printed on a check that identifies the bank that holds the checking account and is
responsible for payment is called the ……..
a. transit number. c. check number.
b. account number. d. NSF number.

20. Marisol has written a $500 check to Stephen, but she has only $300 in her account and it is
returned unpaid to Stephen. Marisol has written a ………
a. floating check. c. postdated check.
b. promissory note. d. bounced check.

21. A written order or promise to pay a sum of money is called a(n) negotiable instrument.

22. A(n) bearer instrument is payable to whoever holds it.

23. A bill of exchange is a negotiable and unconditional written order addressed by one party to another.

24. A short-term note or draft issued by a corporation or government is called commercial paper.

25. A(n) full endorsement transfers a check to another specified party.

26. When the same funds are counted in two depository banks, the funds are called float.
27. A(n) charge card allows a consumer to make purchases, but the account must be paid in full at the
end of the month.

28. Smart cards have embedded microchips and use embedded logic to change and store values and
record transactions.

29. Online systems called person-to-person (P2P) payments allow consumers to pay each other directly for
a product.

30. A(n) postdated check is a check that is dated later than the date on which it is actually written.

31. This morning Terran had a balance in his checking account of $208.68. During the day he wrote two
checks: one to his friend George for $23.00 and one to the comic book shop for $13.75. What is his
account balance at the end of the day? $171.93

32. Mrs. Rodriguez had $1,306.35 in her bank account on December 1. On December 3, she deposited her
paycheck of $1,500.00. On December 4, she wrote four checks in the following amounts: $35.65, $204.55,
$216.76, and $23.42. She made an ATM withdrawal of $50 on December 5. What is her account balance the
morning of December 6? $2,275.97

33. This morning Clarissa had a balance in her checking account of $1765.98. She wrote three checks: one to
the baker for $74.68, one to the florist for $54.39, and one to her mother for $500. She also took her $750
paycheck to the bank and deposited half of it into her account; the other half she took as cash. What is her
account balance at the end of the day? $1,511.91

34. What three things are shown by a check’s identification numbers?


A check’s identification numbers show (1) the check number (2) the bank routing number, and (3) the account
number.

35. What is a promissory note?


A promissory note is a written promise to pay at a fixed or determinable future time a sum of money to a
specified individual.

36. Define the term elements of negotiability and list the six elements.
Elements of negotiability are legal requirements all negotiable instruments must meet. Negotiable instruments
must (1) be written, (2) be signed, (3) make an unconditional promise or order to pay, (4) state clearly the
amount to be paid, (5) be payable on demand or at a defined time, and (6) contain words of negotiation.

37. Why do banks encourage the use of cash cards?


Banks encourage the use of cash cards because they are less expensive than human tellers and are usually
available 24 hours a day.

38. Define biometrics and provide two examples of biometrics.


Biometrics refers to using a distinct individual characteristic to uniquely identify a specific person. Examples
may include two of the following: fingerprints, retina scans, and voice recognition.

39. In banking, who is the holder in due course?


The holder in due course is the person or financial institution that acquires a check or promissory note
received in good faith as payment and who is entitled to payment by the drawer of the check or note.

40. What is a draft? When is a draft typically used?


A draft is an order signed by one party (the drawer or drafter) that is addressed to another party (the drawee)
directing the drawee to pay to someone (the payee) the amount indicated on the draft. Drafts are typically used
to purchase goods and services when the transaction goes beyond the bounds of U.S. banking law.

41. Name and define the four primary types of endorsement. Which is the most commonly used?
A blank endorsement is simply the signature of the holder. A restrictive endorsement limits the use of the
instrument to a means specified by the endorser. A full endorsement transfers the check to another
specified party. A qualified endorsement attempts to limit the liability of the endorser without limiting an
instrument’s further negotiability. The blank endorsement is the most commonly used.

42. What is float? Name three specific ways it can be caused. What effect does float have on the money
supply?
Float is the occurrence of the same funds being counted in two depository banks. Malfunction float is caused by
machine breakdown. Transportation float refers to delays in moving checks from one place to another.
Holdover float occurs when banks are slow in processing transactions. Float distorts the money supply by
making it appear that more money is in circulation than is really the case.

43. What is EFT? Discuss two common forms of EFT. What are the advantages of EFT?
EFT stands for electronic funds transfer. One common form of EFT is direct deposit, in which funds (from an
employer, for example) are sent electronically to the recipient’s bank rather than sending the recipient a check
to cash. Another common form of EFT is automatic payments, in which a bank makes payments to a specified
recipient. Advantages of EFT include safety, accuracy, and immediate use of the funds.

44. What is GoDirect and why is it important?


GoDirect encourages recipients of federal funds to receive payments by EFT. If all FMS disbursements were
made by EFT, about $130 million annual savings could be achieved. As the government is such a large
distributor of funds, programs like GoDirect help drive EFT further into the psyche of American consumers.
This makes consumers more receptive to efforts by private employers to encourage direct deposit as well.

45. What technology enabled Check 21? Describe how this technology achieves costs savings.
Digital imaging technology enabled Check 21. Significant cost savings have been achieved by eliminating
storage, recordkeeping, postage, and labor costs associated with paper checks.

46. What did the Uniform Commercial Code (UCC) largely eliminate?
The UCC largely eliminated the wide variation of legal regulation that could hamper the national payments
system.

47. Explain the Uniform Commercial Code (UCC) rules for a postdated check.
The UCC allows a postdated check as long as the bank customer gives the bank advance notice of the check,
including the check number, account number, amount, date, and to whom the check is payable. If proper notice
were given, the bank, not the customer, would be liable for damages if the check is cashed before the date on
the check.

48. Name and describe the technology used most frequently in the U.S. for contactless payments.
Radio frequency identification (RFID)—also called automatic identification and data capture (AIDC)—uses a
transponder to convey identifying information including the account holder's account or balance information
and the fees being assessed to the account by the business for products or services.

49. What is the difference between electronic check conversion and Check 21?
Whereas Check 21 allows banks to transmit images of a check instead of the actual check, electronic check
conversion allows businesses to use the information on a check to initiate an electronic funds transfer from
your account.

50. Why was the Expedited Funds Availability Act (EFAA) of 1987 passed, and what rules did it direct
the Fed to set?
The EFAA was passed to combat an abuse of the check-payment system practiced by a few banks. It
directed the Federal Reserve to set rules (Federal Reserve Regulation CC) that balanced the needs of
consumers with the need for banks to protect themselves from uncollectible checks.

Das könnte Ihnen auch gefallen