Ch. 5 Quiz Review |Financial Institutions and Savings Plans Quiz

Which of the following is an example of a financial service offered by a commercial bank?

• Selling groceries

• Offering a savings account

• Providing internet services

• Running a restaurant

What is the main difference between a credit union and a commercial bank?

• Credit unions are owned by their members, while banks are owned by investors.

• Banks are only for businesses, while credit unions are for individuals.

• Credit unions do not offer loans, while banks do.

• Banks do not offer checking accounts, while credit unions do.

When comparing different savings plans, liquidity refers to:

• The interest rate you earn on your money.

• How much money you can deposit.

• How easily and quickly you can get access to your money.

• The number of branches a bank has.

What is the primary purpose of a savings plan?

• To pay monthly bills

• To set aside money for future goals

• To buy groceries

• To pay off loans

Which type of payment method uses funds that are deducted directly from your bank account at the time of purchase?

• Credit card

• Cash

• Debit card

• Check

Why might someone choose a Certificate of Deposit over a regular savings account?

• To have more frequent access to their money

• To earn a higher interest rate by agreeing to keep money deposited for a set period

• To avoid all fees

• To use the money for daily expenses

Which of the following is NOT a feature of a regular savings account?

• High liquidity

• Low rate of return

• Fixed term deposit

• Easy access to funds

Which payment method is best for someone who wants to avoid going into debt?

• Credit card

• Debit card

• Payday loan

• Personal loan

Which account type is least likely to be used for saving for future goals?

• Savings account

• Certificate of Deposit

• Checking account

• Money market account

What is the main advantage of a regular savings account over a Certificate of Deposit?

• Higher interest rate

• More liquidity and easier access to funds

• Fixed term

• No interest earned