Financial Literacy Chapter 5 Quiz Review

What is one way banking has changed in recent years?

Connecting with a video teller

Which of the following is NOT a common mistake when managing daily money needs?

Making a budget

What is one of the two main choices when you need quick cash?

Liquidate savings

What does the term “trust” refer to in financial services?

A legal agreement for asset management

Which type of institution is known for offering a full range of financial services?

Commercial Bank

What is a characteristic of prepaid debit cards?

Widely issued by various providers

What is an advantage of credit unions?

Nonprofit status leading to lower loan rates

Which of the following is a non-deposit institution?

Life Insurance Company

What is a major drawback of payday loans?

High annual interest rates

Which of the following is NOT a type of certificate of deposit (CD)?

Fixed-rate CD

What is a money market account?

A savings account with a minimum balance requirement

What type of U.S. savings bond allows you to earn interest based on a fixed and inflation rate?

I bond

What is the purpose of the Truth in Savings Act?

To disclose information about savings accounts

What is the primary advantage of using a debit card?

Spending your own funds

Which type of checking account typically incurs a monthly service charge?

All of the above

What does a certified check guarantee?

All of the above

Which endorsement requires the words “for deposit only”?

Restrictive endorsement

How can you manage your checking account effectively?

Regularly reconcile your checkbook balance

What is the maximum interest rate for payday loans in some cases?

780%

What is the primary purpose of a money order?

To guarantee payment

What does FDIC stand for?

Federal Deposit Insurance Corporation

What is one feature of a high-yield savings account?

Higer interest rates with restrictions

Which of the following financial services is generally NOT provided by credit unions?

Investment services

What are “smart cards” primarily used for?

Digital wallet transactions

Which type of account is specifically designed for managing cash flows for businesses?

Asset management account

What happens if you withdraw funds from a CD before its maturity?

You may face a penalty

Which payment method allows immediate access to funds?

Debit card

When comparing payment methods, what is a primary advantage of using credit cards?

Building credit history

What is a common restriction for money market accounts?

Limited transactions per month

What can be a drawback of using check-cashing outlets (CCOs)?

High percentage fees