Review
The Federal Deposit Insurance Corporation (FDIC) is an insurance agency that is supported by the government in the United States. True or False
True
Which type of institution receives money from households like commercial banks do, but uses a large percentage of their money on home mortgages and receives money from individual deposits? A. Credit union B. web-only financial institution C. Savings and loan institution D. brokerage firm
Savings and Loan Institution
Which type of financial institution sells shares to individuals and pools funds to buy financial securities? A. savings and loan institution B. mutual fund company C. credit union D. commercial bank
Mutual Fund Company
Miguel is looking to own a small piece of several companies as an investment. He wants to take some of his extra cash and purchase shares of some technology companies. Which type of financial business will MOST LIKELY meet his needs? A. stock-held savings institution B. web-only financial institution C. Mutual fund company D. life insurance company
Mutual Fund Company
Amanda is 20-years-old and looking to invest $1000. She has always played it safe with very low-risk investments, but now she is ready to take a bigger risk to see if she can earn a bigger return on her investment. She is comfortable having this money tied up for several years, but she would like to withdraw the money sometime in the next 5 to 10 years. Which type of investment will BEST fit Amanda’s needs? A. money market mutual fund B. certificate of deposit C .bond D. 401k
Money Market Mutual Fund
Paul wants to take his girlfriend out to dinner for their anniversary, but he has no cash available. He gets paid on March 28th, but the anniversary dinner will be on March 20th. He needs to be able to access the money from his paycheck several days in advance. Even though it can be risky, what type of business could best meet Paul’s needs? A. rent-to-own service B. pawnshop C. check cashing business D. payday loan business
Pay Day Loan Business
Which financial service offers credit opportunities that can be short-term or offered over an extended period of time and are used for big things like home mortgages, automobiles, home improvements, education, medical expenses, or travel?A. payment services B. loans C. savings D. financial planning
Loans
How do brokerage firms primarily make their profits? A. consumer deposits B. government deposits C. dividends D. fees or commissions on sales or transfers
fees or commissions on sales or transfers
Thomas hates physically going to a bank. He wants to be able to open an account and start a banking relationship without ever leaving his house. What is the BEST banking option for Thomas? A. credit union B. web-only financial institution C. savings and loan institution D. commercial bank
web-only financial institution
Adel wants to get $100 immediately to pay for concert tickets. He currently has no cash or income, but he has a nice gold watch that is worth $500. He is looking for a place to loan him the $100 by using his watch as collateral. Even though it can be risky, what type of business could best meet Adel’s needs? A. rent-to-own service B. pawnshop C. check cashing business D. payday loan business
Pawnshop
Rebecca received a check from her parents for her 20th birthday. She, however, does not have an account at any bank, so she is unable to cash the check. Even though it will cost her a fee, where can Rebecca go to get her money? A. rent-to-own service B. pawnshop C. check cashing business D. payday loan business
Check Cashing Business
What type of service do pawnshops generally offer? A. check cashing B. loans on possessions C. high interest savings accounts D. life insurance
Loans on possessions
Patrice is trying to decide if she needs a checking account, a savings account, or both. She asks for your advice. What TRUE statement about these accounts can you share with Patrice? A.Some savings and checking accounts have a minimum balance requirement and will charge a fee if the balance falls below this amount. B. Savings and checking accounts are usually not available at web-only financial institutions. C. Savings accounts generally earn no interest on the balance of the account. D. Checking accounts generally earn a lot of interest on the balance of the account.
Some savings and checking accounts have a minimum balance requirement and will charge a fee if the balance falls below this amount.
What is TRUE about non-depository financial institutions? A.They do not offer other types of accounts, such as savings and checking accounts. B. Traditionally, they focused on providing loans and other money management services. C. They are all federally insured. D. They include commercial banks and credit unions.
Traditionally, they focused on providing loans and other money management services.
Thirty-year-old Henry tells his wife that he has $1,000,000 saved already. She tells him they should go on a big vacation soon. Henry tells her, “No. The $1,000,000 is in my 401k account.” What is Henry MOST likely saving this $1,000,000 for? A. to pay his current mortgage B. to purchase bonds C. to use during retirement D. to pay for his education
to use during retirement