Unit 2 Quiz: Using Financial Services

What is the purpose of interest paid by borrowers to financial institutions?

• To allow financial institutions to pay interest to savers

• To increase the profits of financial institutions

• To fund the operations of financial institutions

• To provide loans to borrowers

What are the differences between 'brick and mortar' financial institutions and online-only institutions?

• Brick and mortar institutions offer higher interest rates, while online-only institutions offer more convenience

• Brick and mortar institutions have physical branches, while online-only institutions operate solely online

• Brick and mortar institutions have more fees, while online-only institutions have better customer service

• Brick and mortar institutions have stricter eligibility requirements, while online-only institutions have more lenient requirements

How can financial institutions help people accomplish their financial goals?

• By providing savings accounts and investment opportunities

• All of the above

• By offering loans and credit cards

• By providing financial education and guidance

What are the risks associated with using banking alternatives such as check cashers, payday loans, and pawn shops?

• Potential for fraud and exploitation

• Limited access to financial services

• High fees and interest rates

• All of the above

Which government agencies insure deposits in banks and credit unions?

• IRS and FTC

• FDIC and NCUA

• SEC and CFPB

• SBA and OCC

What is the purpose of overdraft protection?

• To prevent unauthorized access to an account

• To cover a payment when an account balance drops below zero

• To provide additional funds for large purchases

• To protect against identity theft

What is the main difference between online banking and mobile banking?

• Mobile banking is only available to younger generations

• Mobile banking is more secure than online banking

• Online banking offers more features than mobile banking

• Online banking requires a computer, while mobile banking can be done on a smartphone

What is the purpose of a digital wallet?

• To provide financial advice

• To transfer money between bank accounts

• To store physical cash

• To make online purchases

What are the pros and cons of using credit cards?

• Pros: Convenient and can build credit. Cons: High interest rates and potential for debt

• Pros: No fees and better security. Cons: Limited acceptance and no rewards

• Pros: Easy to use and can earn rewards. Cons: Limited credit limit and potential for overspending

• Pros: Low interest rates and better fraud protection. Cons: Difficult to qualify for and limited acceptance

When deciding how to pay for a purchase, what factors should you consider?

• Acceptance, credit limit, and convenience

• Availability of funds, credit score, and interest rates

• Interest rates, credit limit, and fees

• Convenience, security, and rewards