Question 1 : The slope of the treasury yield curve normally reflects increasing interest rates over time, and represents the cost of borrowing for the US government.

False

True

Question 2 : What do you call a check that a bank writes on its own account made payable to a third party on your behalf?

A cashier's check

A money order

A certified check

A bank draft

Question 3 : A money market mutual fund that invested in commercial paper issued by corporations would generally be considered a low risk investment. True False

Question 4 : Your bank has two checking account options, one pays tax-free interest at a rate of 3% per annum and the other pays taxable interest at a rate of 4.5% per annum. You are currently in a 25% marginal tax bracket. If you converted the tax-free interest rate to the comparable taxable interest rate you would find that:

The comparable taxable rate is 4.0%, thus you would select the taxable account

The comparable taxable rate is 3.08%, thus you would select the tax free account

You would always select the account bearing the highest interest rate regardless of whether it's taxable or tax free

The comparable taxable rate is 6.0%, thus you would select the tax free account

Question 5 : A UCF graduate writes 22 checks per month and pays $0.04 per check. The bank pays the graduate 1% interest per annum, and he/she maintains an average monthly balance of $600. What is the graduate's net annual cost of maintaining the checking account after giving effect to the interest earned (ignore taxes)?

$ 7.20 net cost

$ 60.00 net cost

$ 66.00 net cost

$ 4.56 net cost

Question 6 : A student's bank statement reflects $1,600 at month end. The student's checkbook, before reconciling, reflects $1,500. The student has $5 of interest on the bank statement which has not been posted to his/her checkbook, deposits in transit of $100, and outstanding checks of $195. What is the reconciled bank balance?

$1,400

$1,520

$1,510

$1,505

Question 7 : Under the compare checking accounts page, click the "Common everyday checking account fees" and a PDF file will appear. Using the data in the PDF, which of the following occurring in each statement cycle will result in waiving the normal monthly fee?

Any of the above would result in the waiver of the monthly fee.

10 debit card purchases and/or payments

$1,500 minimum daily balance

Direct deposits totaling $500 ore more

Linked to a Wells Fargo campus ATM or campus debit card

Question 8 : The FDIC and NCUA insure non-retirement accounts in banks, savings & loans, and credit unions for up to__________:

$250,000

$500,000

$10,000

$100,000

$50,000

Question 9 : Assume the following exchange rates are "market" rates today: 1 Euro = 1.50 US dollars OR 1 US dollar = .6667 Euros You are planning to exchange $5,000 US dollars for Euros. Which of the following bank deals will give you the most Euros? Hint: See the excel file in the Modules Chapter 5 for an illustration of how to solve this problem.

1 US dollar = .6667 Euros;Exchange fee = 4%

1 US dollar = .6451 Euros; No exchange fee

1 US dollar = .625 Euros; Exchange fee = 3%

1 US dollar = .7142 Euros; Exchange fee = 2%

1 US dollar = .6896 Euros; Exchange fee = 1%

Question 10 : In the event that an individual believes that interest rates are likely to move UP in the next year or two, what actions should he/she take?

Invest long (such as long term CDs); borrow long term at fixed rates

Invest short (such as short term CDs); borrow short term at variable rates

Invest long (such as long term CDs); borrow short term at variable rates

Invest short (such as short term CDs); borrow long term at fixed rates