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exam 2 30/40 Finc
Terms in this set (39)
Your commercial bank is offering a one year cd with 7% interest rate. a competing bank offers an interest rate of 10 % on their one year certificate. the risk premium offered by the competing bank is
Lorenzo is considering 2 banks for his checking account. Suny bank requires a min. deposit of $100, charges of monthly fees $8 plus 5 cents a check. Merchants banks also requires min deposit of $100, charges no monthly fee, but a per check charge of 15 cents. How many checks would Lorenzo need to write each month to make Suny bank cheaper than Merchants?
which of the following is a nonprofit depository institution that provides services only to members who have common affiliation?
deposits at commercial banks are insured by a government owned agency called
Federal Deposit Insurance Commission
if the federal reserve buys or sells treasury securities to affect the money supply, it uses
open market operations
Juan has 1000 he would like to invest in a cd. his bank offers two alternatives, a one year cd 6% or a 2 year cd paying 9%. Juan has been reading that interest rates are rising and based on his research he estimates that by year end the rate on the one year cd will increase 10%. What alternative gives the most interest and what would the total interest be.
one two year cd returning $180
Which of the following is not a depository institution
American 1 Federal Credit Union
Butterfield and Edwards Brokerage Firm (correct)
First National Bank of Chicago
New England Savings Bank
a one year cd has a ___ return and ___liquidity than a checking account
stopping payment on a check
can only be used if the check has not cleared
the following money market securities are insulated from credit risk with the exception of
Which of the following is not true about a certificate of deposit?
are only offered in denomination of 100,000 or more
which of the following is not a good short term money market investment?
AT& T common stock
All of the following are true of Treasury securities except they
have a minimum par value of $100
the secondary market for tbills means that
an individual may purchase tbills that were owned by some other investor rather than from the government
If you think that your identity has been stolen, the FTC recommends you do all of the following except
file a police report
contact the credit bureaus
call your creditors
destroy all your credit cards(correct)
the item that receives the most weight in the FICO credit scoring system is
credit payment history
which of the following statements is true regarding non-installment credit?
credit is usually issued for 30 days or less
all of the following are correct statements about credit except
the interest is the total amount to be repaid
which of the following is not true regarding revolving open-end credit
if the balance is not paid off over a period of months a penalty is incurred
which of the following items should not be removed from your wallet
infrequently used credit cards
social security card
A credit card statement does not contain which of the following
who purchased the item
a credit card whose interest rate charges as a specific market interest rate charges is said to have a
Bill borrowed 3600 and will be charged a simple interest rate of 18%. Bill will pay___ interest for borrowing the money on April 1 and repaying the money on Dec. 31
credit cards have all the following advantages except
they allow you to borrow cash interest free for 60 days
What is the interest cost and the total amount due on a six month loan of $1500 at 13.2% annual interest?
In comparing credit cards to other forms of credit, which of the following is false?
credit cards can be viewed as source of funds
All are true regarding a cosigner on an account except
the lender may not seize the assets of the cosigner
the loan contract identifies all of the following except
The APR measures the finance expenses (including interest and all other expenses) on a loan on an
personal loans include the following except
Over the life of the loan, the payment to principal ____and the portion to interest expense____
what is the total cost of a leasing vehicle for 3 years that requires a security deposit of $300(would earn 3%), has monthly lease payments of 385 and has mileage restriction of 10,000 miles with excess mileage resulting in a 10 cents a mile charge. Assume the lease exceeds the miles by 8,000 miles
Purchasing a car is a big decision. therefore you should not
rely on the dealer personnel as the best source for expert advice
If you anticipate your income rising slowly but steadily over the years, you may want to consider a
graduated payment mortgage
Points paid at closing are for payment of
Your home value is likely to be higher with all of the following except
being in an area that has just been zoned for industrial use
If you obtain an FHA or VA loan you will make additional payments each month to cover your home insurance and property taxes that will be places in an account called an
when purchasing a home which of the following costs will you not incur?
when buying a home all of the following are factors one should consider except
the existing interior paint color
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