AnswersOK-Personal Financial Literacy S1 – EDGNTY-83861 26-27Budgeting

Banking: How to Manage Your Money Answers

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1
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In which situation would a certificate of deposit (CD) be the best banking choice?

A
Samuel is setting money aside but still needs emergency access to it.
B
Hafsa wants a guaranteed return, and won’t need the money for several years.
C
Darren is looking for an investment that has a very high interest rate.
D
Raj is looking for an investment with a fast return so he can reinvest.
2
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Sara is 16 years old and would like to open a bank account. What will she need in addition to her parent or guardian? Select four answers.

A
government-issued ID or birth certificate
B
high school diploma
C
money to start the account
D
social security number or immigration form
E
proof of address
3

This is a table that could be used to maintain a record of account transactions. It is similar to what is found in a checkbook ledger. Some of its column headings are missing. How should these columns be labeled?

Question illustration
A
Balance, Transaction Code, Description
B
Check Number, Description, Balance
C
Transaction Code, Balance, Notes
D
Description, Check Number, Balance
4

What is the best reason for Jacinta to have a savings account in addition to a checking account?

A
A savings account accepts all direct deposits and processes all direct withdraws.
B
A savings account ensures she will never go into debt.
C
A savings account guards her money against inflation.
D
A savings account keeps her money safe and separate from her spending money.
5

What is a major difference between retail banks and credit unions?

A
Retail banks only serve businesses, while credit unions only serve individuals.
B
Retail banks operate in order to earn profit, while credit unions are nonprofit.
C
Retail banks only have small local branches, while credit unions are nationwide.
D
Retail banks manage a person’s money, while credit unions focus on providing loans.
6

Which of these is the best reason for Nina to monitor her bank account statements online or on her cell phone app?

A
to know when her bills are due
B
to determine the exact date she can retire
C
to ensure she's paying her fair share in taxes
D
to know how much money she has for budgeting
7

What is one benefit of purchasing saving bonds?

A
Saving bonds are purchased from the government and guaranteed to increase in value.
B
Saving bonds are purchased from commercial banks and guaranteed to increase in value.
C
Saving bonds are short term investments backed by the government to protect from loss.
D
Saving bonds are long term investments created to help first time home buyers obtain a mortgage.
8

Karina keeps excellent records and always knows precisely how much is in her bank account. However, when she receives her bank statement, she’s surprised to see that she has been charged a $5.00 overdraft fee. After reviewing her well-kept records, she cannot find anything that is incorrect. Which would be the best action for Karina to take?

A
Review her records again.
B
Wait for the bank to call her.
C
Ignore the fee because it is relatively small.
D
Check her records against her bank statement.
9

Which of these is an advantage of checking accounts?

A
Checking accounts prevent the customer from having overdraft fees.
B
Checking accounts allow convenient ways to deposit or withdraw funds.
C
Checking accounts are processed immediately so customer and bank records always match.
D
Checking accounts offer limited checks but offer higher rates of interest.
10

Look at the table below showing an example of a checkbook ledger.

Question illustration
A
$624.50
B
$704.50
C
$755.50
D
$784.50

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