S1 U2 Banking - Unit Test

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Hour/Class:

1. Which of the following is an effective strategy for personal saving?

• Wait until the end of the month and save whatever is left in your checking account
• Save a certain percentage of each paycheck and deposit it directly into a savings account
• Cover all of your wants and needs and save whatever is left over
• Take out a payday loan so you can save before you receive your paycheck

2. All of the following statements about bank accounts are true, EXCEPT…

• If the bank is FDIC-insured, your money, up to the FDIC limit, is safe even if the bank fails
• Many banks pay interest on the money you deposit into your savings account
• Historically, savings accounts earn higher returns than investments in the stock market
• Money in a checking account is usually easy to access via ATM, debit card or check

3. You are developing a savings plan and using short-, medium-, and long-term goals to motivate you. Which represents possible goals from short-term to long-term? Save for…

• Retirement, a house down payment, college tuition
• A new cell phone, college tuition, a house down payment
• A new cell phone, dinner with friends this weekend, a new bike
• Retirement, college tuition, a vacation

4. Fill in the blanks with the correct responses. If you follow the 50-30-20 rule of budgeting, you'll be putting 50% of your monthly income toward _______________, 30% of your monthly income toward _____________, and 20% of your monthly income toward ______________.

• Needs, wants, savings
• Savings, needs, wants
• Needs, savings, wants
• Wants, needs, savings

5. Which statement best describes a savings account?

• This account offers a convenient way to pay bills and access cash from an ATM
• This account pays you interest on money you have put away for later to help your money grow
• This account is automatically debited when you use a debit card
• This account typically allows an unlimited number of transactions per month

6. You are at the checkout counter at the local supermarket and use your debit card to pay for your groceries. Where does the money for this purchase come from?

• Your credit card company covers the cost
• It is deducted directly from your checking account
• Your credit card company provides you with a cash advance to cover the cost
• It is deducted directly from your savings account

7. Jocelyn gets a text alert from the bank that her account balance has dropped below $100 after a series of $20 ATM withdrawals. She has not used her ATM in over a week and wonders what she should do. What would you recommend?

• Wait until her monthly statement arrives so she can check to see if those withdrawals are still there
• Wait a week as it is fairly common for the bank to catch mistakes like this
• Check her wallet to be sure her debit card has not been stolen. If she still has it, then she should not worry.
• Contact her bank immediately as it appears that her account may have been hacked