Banking Terminology

Self-Study for Basic Econ Final

Basic Economics (Lewis/Phipps)

Banking Terminology Self-StudyInstructions

The question will be first – click the mouse to see the answer

Clicking the mouse a 2nd time will move you on to the next question

Review as many times as you need to

Banking Terminology Self-Study

When you deposit or cash a check you are required to turn it over and sign the check (taking responsibility for the check). What is that called?

Endorsement

Banking Terminology Self-Study A car loan, with your

car as collateral, is an example of what kind of loan?

Secured loan

Banking Terminology Self-Study You would rent this at

a bank in order to keep important documents (passports, birth certificates, tax returns, etc.) safe.

Safe Deposit Box

Banking Terminology Self-Study A personal loan, with

no collateral is an example of what kind of loan?

Unsecured loan

Banking Terminology Self-Study The fee a lender

charges you to borrow money is called what?

Unsecured loan

Banking Terminology Self-Study What do you call the

password for an ATM/Debit card?

PIN (personal identification number)

Banking Terminology Self-StudyTrue or False

If you use a debit card at a gas station you are making a POS (point of sale) transaction.

True or False?

True

Banking Terminology Self-StudyTrue or False

The funds in a Money Order are guaranteed.

True or False?

False

Banking Terminology Self-StudyTrue or False

The FDIC (Federal Deposit Insurance Corporation) insures depositor’s funds up to $100,000 per depositor per bank.

True or False?

True

Banking Terminology Self-StudyTrue or False

If your account is overdrawn you are not responsible for paying the money back to the bank if you don’t want to.

True or False?

False

Banking Terminology Self-StudyTrue or False

A payee is the person or business the check is made payable to.

True or False?

True

Banking Terminology Self-StudyTrue or False

A debit adds to your balance.

True or False?

False – it subtracts

Banking Terminology Self-StudyTrue or False

Forgery is the alteration of a document with the intent to fraud.

True or False?

True

Banking Terminology Self-StudyTrue or False

In a joint tenancy account, both parties own the funds in the account equally.

True or False?

True

Banking Terminology Self-StudyTrue or False

Accrued interest is interest that has built up but has not yet been paid.

True or False?

True

Banking Terminology Self-StudyTrue or False

Outstanding checks are checks you have written that have not yet cleared the bank.

True or False?

True

Banking Terminology Self-StudyTrue or False

An NSF check is also known as a bounced or rubber check.

True or False?

True

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

POD Payable upon Death

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

EFT Electronic Funds Transfer

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

Payer The person who writes a check

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

CD Certificate of Deposit (you guarantee the bank that you will keep the funds on deposit for a certain length of time and they will pay you higher interest)

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

DOB Date of Birth

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

APR Annual percentage rate

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

OD Overdraft

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

NSF Non-sufficient funds

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

ATM Automated teller machine

Banking Terminology Self-StudyAcronyms (or what do these letters mean?)

Credit (does what to your balance)?

Adds to your balance

Banking Terminology Self-StudyMultiple Choice - choose best answer (s)

Which of the following are most likely to be kept in your safe deposit box?

passport birth certificate checking account

statement copies of your will

Passport, birth certificate, copies of your will

Banking Terminology Self-StudyMultiple Choice - choose best answer (s)

Bill accepted Sue’s personal check for some work he did for her. Bill endorsed it on the back and deposited it into his bank. The check (for $100) bounced and the bank charged Bill $10.00. Which if the following is true?

The bank is out the $100.00. The bank has to contact Sue if

they want their money. Bill can collect the $100 from Sue

but he has to take responsibility for the $10 fee.

Bill can collect both the $100 and the $10 fee from Sue.

Bill can collect both the $100 and the $10 fee from Sue

Banking Terminology Self-StudyMultiple Choice - choose best answer (s)

What kind of account are you investing in if you put in money for a set period of time (and can not withdraw it early without a penalty)?

Checking account Certificate of Deposit Savings account Money Market account

Certificate of Deposit

Banking Terminology Self-StudyMultiple Choice - choose best answer (s)

The bank can put a “hold” on any checks you deposit until the check (funds) clears. Which of the following statement(s) is true?

A. The bank has to tell you if they are putting a hold on your funds.

B. The bank has to tell you how many days they are holding the funds.

C. The bank uses your bank account history and the amount & kind of check to determine if they will hold your funds.

D. If you write a check that comes in before the hold expires, the bank can bounce your check.

E. All of the above

E. All of the above

Banking Terminology Self-StudyMultiple Choice - choose best answer (s)

If you go bankrupt, which of the following happens? (May be more than one correct answer)

A. Your credit rating is negatively affected for 7 years

B. You still owe the creditors money but have more time to pay it back

C. Bankruptcy discharges (clears) your debts

A & C

Banking Terminology Self-StudyMultiple Choice - choose best answer (s)

Which of the following are examples of collateral? (May be more than one correct answer)

A. The loan company has their name on the pink slip for your new car

B. The loan company has their name on the mortgage to your house

C. The bank puts a “hold” on your savings account for the amount of money you borrow

D. The bail bondsman asks for a percentage of your bail up front in order to insure that you show up for court

E. You loan money to your friend with a verbal agreement and a handshake

A, B, C, D