Topic Test Answers

Vítor knows he must prepare and possibly prevent overdraft funds fees since they are charged automatically. Which statement below would be the least effective element of a plan Vitor could use to accurately estimate (or minimize) overdraft fees on the account? a. Always keep extra money in the account for such unexpected events. b. Use the debit card for a large number of small purchases and check the balance later. c. Always keep track of how much is being temporarily held d. Do not enter deposits into the register until they are verified as available. Please select the best answer from the choices provided

Bill wants to open a checking account to pay bills from and a savings account to cover overdrafts and other emergencies. He wants online services, and a debit card. He analyzes the following statements of fees from State Bank and Common Bank: Based upon past experience, Bill expects to accidentally overdraft the account 2 times per year, unfortunately, due to unexpected charges and miscommunications. He expects no 2nd copies of statements, and to use network ATMs 4 times per month with State Bank (due to less in-network ATMs being available), or 2 times per month with Common Bank. He has $2500 to deposit to an emergency savings account for overdraft protection, and thinks that the balance will be enough to cover most all overdrafts in the future if automatic transfers are made when needed. Based on the tables of fees, which bank is expected to cost the least amount in fees per year? a. State Bank is expected to cost the least. b. Common Bank is expected to cost the least. c. State Bank and Common Bank would have the same costs for Bill. d. The fees cannot be estimated in advance. Please select the best answer from the choices provided

Sally just purchased a beautiful home on a riverbank for what she thought was a very good deal. She later learned that her house was very susceptible to flood damage during the rainy season. Which of the following statements best describes the effect the location of Sally’s new home will have on her homeowners insurance premium?a.Financial loss due to flood damage is likely. Her insurance premiums will be higher than homes not on the waterfront.b.Since floods are likely, the value of the home decreases significantly, lowering the insurance premium at the same time. c.Since floods happen so infrequently, they are not considered a real threat to the value of the home. Sally’s insurance premium will not be affected.d.While extremely annoying, flood damage is usually inexpensive and will not affect the value of the home. Sally’s insurance premium should not be affected.

Macky wants to open a checking account. He is examining different banks and banking accounts. Then he will choose a bank account for his needs. Which of the following statements should not be one of Macky’s reasons for choosing a bank?a.Being more informed leads to being better prepared to make financial decisions.b.Banks could have charges that Macky does not know about until reading carefully.c.The first bank Macky considered offered a chance to win a prize upon opening an account.d.He will become more aware of how well banks meet his particular needs.

Which of the following most accurately describes when a debit card transaction takes effect?a.The transaction is completed almost immediately after making the purchase.b.The transaction takes two to three business days to clear.c.All debit card transactions are processed simultaneously at the end of the day.d.Debit card transactions are completed when you pay your monthly debit card bill.