1) The slope of a treasury yield curve normally reflects increasing interest rates over time, aand represent the cost of borrowing for the US government.
A) False
B) True
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) Bank draft
B) Money order
C) Certified check
D) Cashier's check
3) A money market mutual fund that invested in commercial paper issued by corporations would generally be considered a low risk investment.
A) False
B) True
4) Your bank has two checking account options, one pays tax free interest at a rate of 2% per annum and the other pays taxable interest at a rate of 3% 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:
A) The comparable taxable rate is 2.667% thus you would select the taxable account
B) The comparable taxable rage is 2.35% thus you would select the taxable account
C) The comparable taxable rate is 3.53% this you would select the tax free account
D) You would always select the account bearing the highest interest rate
5. A UCF grad writes 22 checks per month and pays $0.25 per check. The bank pays the grad 1% interest per annum, and they maintain an average monthly balance of $600. What is the graduates net annual cost of maintaining the checking account after giving effect to the interest earned (ignore taxes)?
A) $ (30.50) net benefit
B) $60.00 net cost
C) $66.00 net cost
D) $54.00 net cost
6. A student’s bank statement reflects $1600 at month end. The students check book, before reconciling, reflects $1500. The student has $20 of interest on the bank statement which has not been opted to their check book, deposits in transit of $110, and outstanding checks of $190. What is the reconciled bank balance?
A) $1,510
B) 1,520
C) $1,400
D) $1,500
8. The FDIC and NCUA insure non-retirement accounts in banks, savings & and loans, and credit unions for up to:
A) $500,000
B) $50,000
C) $250,000
D) $10,000
E) 100,000
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 $2000 US dollars for euros. Which of the following bank deals will give you the most Euros?
A) 1 US dollar = .6667 Euros; exchange fee = 3%
B) 1 US dollar = .625 Euros; exchange fee 2%
C) 1 US dollar = .7142 Euros; exchange fee= 3%
D) 1 US dollar = .6896 Euros; no exchange fee
E) 1 US dollar = .6451 Euros; exchange fee = 1%
10. In the event that an individual believe that interest rates are likely to move UP in the next year or two, what actions should he/she take?
A) Incest long (such as long term CDs); borrow long term at fixed rates
B) Invest short (such as short term CDs); borrow short term at variable rates
C) Invest long (such as long term CDs); borrow short term at variable rates
D) Incest shirt ( such as short term CDs); borrow long term at fixed rates