Finance exam prep

buying decisions

Factors such as where you live and your ethnic background can affect your

Commercial banks, savings and loan associations, mutual savings banks, and credit unions are financial institutions that accept secure deposits and provide transfer and lending services

Which of the institutions accept secure deposits?

The more frequently your balance is compounded, the greater your yield or rate of return would be.

How could you earn a greater yield of return?

The amount of deposits held by a bank affects its ability to loan money. Banks make money by making loans.

How do banks make money?

The price of the product maybe lower than it was when it first came out because nowthe demand for the product has decreased. When businesses want to reduce the supply of a product, they have clearance sales

When would a business put up a clearance sale?

FIC includes depreciation, interest on the loan, insurance and various fees such as license and registration fees.VOC include gas and oil; tires; maintenance and repairs; and parking and tolls

Differentiate between fixed ownership costs and variable operating costs?

A commercial bank is a for profit institution that offers a full range of financial services including checking, saving, and lending.

What is the role of a commercial bank?

1. Pre shopping activities2. Comparing products3. Negotiating lower prices4. operating the item properly

Mention the four phases of research based approach to buying?

Direct deposit saves time, money, and effort; and offers a safe way to transfer funds

How can direct deposit help the users?

Rebate

partial refund of the price of a product

Demand deposit

Money in a checking account is called _______.

Overdraft protection

an automatic loan made to an account if the balance will not cover the checks written

Stop-payment order

is a request that a bank or other financial institution not cash a particular check

Certificate of deposit

_____________ is best suited for saving money over a period of years.

A savings alternative in which money is left on deposit for a stated amount of time to earn a specific rate of return.

borrow money

Credit cards allow you to _________ for a short term

savings and loan associations.

Problematic financial businesses include ________

bank failure.

The Federal Deposit Insurance Corporation insures depositors against losing their money in the case of a _______

lower fees and loan rates

Compared with commercial banks, credit unions generally offer

bank reconciliation

To earn high interest rates on a certificate of deposit, you must not accept completing a monthly ________

money market

In _________ savings plan the interest rate vary from month to month

the current date, the name of the payee. your signature on the front

When writing a check, include all of the following;

comparing checks in the check record with those on the statement

The first step in balancing a checkbook is

quantity and quality are basically the same

The lowest price is generally the wisest choice when ____

automobiles

Products often purchased using price negotiation are ____.

additional fees

A drawback of paying on credit is having ____.

mid season sale

A good time to find a bargain on a swimsuit is at a(n) ____

pawnshops, check cashing outlets rent-to-own centers

problematic financial institutions include

direct deposit

an automatic deposit of an employee’s paycheck into a designated bank account

compounding

the process in which interest is earned on both the principal and any previously earned interest

debit card

a card issued by financial institution that allows you to withdraw money from your account or pay for purchases by deducting funds directly from your account

credit union

a nonprofit financial institution that is owned by its members and organized for their benefit

unit pricing

the use of a standard unit of measurement to compare the prices of packages that are different sizes

warranty

a written guarantee from the manufacturer that states the conditions under which a product can be returned, replaced, or repaired

meditation

the attempt by a neutral third party to resolve a conflict between a customer and business through discussion and negotiation

arbitration

the process in which a conflict between a customer and a business is resolved by an impartial third party whose decision is legally binding

open dating

a method of indicating the freshness, “or shelf life,” of a perishable product

annual compounding yield

the amount of interest that a financial institution would pay on a $100 deposit, after compounding, for one year

rate of return

the percentage of increase in the value of savings from earned interest

saves members money

An advantage of cooperative is