Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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1.
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An example of a deposit-type financial institution is
a. | an investment company. | c. | a consumer finance company. | b. | a credit
union. | d. | a life insurance
company. |
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2.
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The widest range of financial services is offered by
a. | a mutual savings bank. | c. | a commercial bank. | b. | a check-cashing outlet. | d. | an investment
company. |
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3.
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A credit union differs from other financial institutions in that it is
a. | chartered by the federal government. | b. | owned by foreign investors. | c. | taxed at a different
rate. | d. | organized as not-for-profit organization. |
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4.
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The main purpose of a consumer finance company is to
a. | provide home mortgages. | b. | offer interest-earning checking
accounts. | c. | offer different types of savings plans. | d. | make loans for
durable goods. |
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5.
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A check-cashing outlet is commonly used by
a. | people who do not have a bank account. | b. | consumers who want to buy
homes. | c. | people who have life insurance. | d. | investors who desire a high rate of
return. |
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6.
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Automatic teller machines (ATMs)
a. | provide automatic teller services quickly and easily. | b. | provide automobile
loans. | c. | accept applications for credit cards. | d. | report the current value of
investments. |
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7.
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The items most likely to be stored in a safe-deposit box are
a. | cash | b. | checkbooks | c. | bond & stock
certificates | d. | deposit slips for a savings account |
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8.
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A common advantage of a checking account is that
a. | every checking account earns interest | b. | lost checks are insured by the federal
government | c. | banks automatically tell you when payments are due | d. | canceled checks can
serve as proof of payment. |
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9.
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The fee a bank charges for handling a checking account is a
a. | credit transaction. | c. | service charge. | b. | deposit. | d. | minimum
balance. |
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10.
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Which checking account pays the depositor earnings?
a. | an EFT account | c. | a regular account | b. | an interest-earning account | d. | a joint account |
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11.
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The purpose of a signature card is to
a. | serve as identification when cashing a check | b. | allow a bank
customer to obtain cash by just signing a special form. | c. | allow customers to
make deposits quickly. | d. | serve as the bank’s official record of a
depositor’s signature. |
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12.
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Which account is an account opened by two or more people together?
a. | a joint account | c. | a business account | b. | an EFT account | d. | an interest-earning
account |
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13.
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When adding money to a checking account, a bank customer prepares a
a. | bank statement | c. | deposit slip | b. | signature card | d. | sharedraft |
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14.
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The purpose of an endorsement is to
a. | open a checking account with direct deposit. | b. | provide written
evidence that payment has been received. | c. | convert US currency to the currency of another
country. | d. | instruct the bank to automatically put an amount each month in your savings
account. |
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15.
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Angelica recently received a check for $50. She needs to repay her father
that same amount. To transfer the check to her father, Angelica would use which
endorsement?
a. | Special | c. | Restrictive | b. | Blank | d. | Continuous |
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16.
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A restrictive endorsement commonly uses which of the following words?
a. | “Pay to the order of.” | b. | “For deposit
only.” | c. | “Void if not cashed within 60 days.” | d. | “No words are
necessary.” |
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