Course Quiz - Financial Fitness Center

1.

What is the advantage of opening a checking account at a check cashing store?

Higher interest rates

Lower fees

Easy-to-read account statements

None -- you can't open a checking account at a check cashing store.

None -- you can't open a checking account at a check cashing store. Accounts don't exist at these stores. Rather, you cash your check and exit the store with the money in your pocket.

2.

Which of the following best explains why checking accounts aren't effective for saving money?

They are designed for spending money

Their fees are too high

They can't earn interest or dividends

None of the above

They are designed for spending money. Because they are designed to be spent by you rather than used by the institution holding them, they pay little or no earnings.

3.

Good habits for monitoring and managing your accounts include _______.

Reviewing your balance 2-3 times each week or before making large purchases

Reviewing your transaction activity to be aware of your spending habits and to check for accuracy

Comparing the checks you have written to those that have been cashed per your statement or online transaction activity

All of the above

All of the above. All are good habits to incorporate into managing your daily finances.

4.

A benefit of establishing a relationship with a financial institution as a young adult is that _______.

You build a strong financial foundation with an institution that knows you.

The interest rate on your accounts is higher the longer you have been a customer.

You gain access to other financial products and services you may need like credit cards, mortgages, auto loans and investment services.

You get both the strong financial foundation and the access to other financial products and services.

You get both the strong financial foundation and the access to other financial products and services. These benefits are important for most consumers.

5.

Suppose your balance at the end of the month in your check register is $98. Let's say you would like to have a little more of a cushion and would like your balance to be at least $200 at the end of the month. What are your options for accomplishing this?

Reduce your variable expenses, like entertainment

Eliminate a 'want' like cable

Consider reducing a fixed cost like housing/rent by moving to lower-cost housing or getting a roommate to share the rent

All of the above

All of the above. Reducing your expenses is all about making choices. What tradeoffs are you willing to make to free up additional savings dollars?

6.

An overdraft fee occurs when your checking account withdrawals ________.

Exceed the transaction limit for the month

Bring your account balance below zero

Exceed your dollars you deposit for the month

All of the above

Bring your account balance below zero. Your account is overdrawn when your balance goes below zero. It doesn't matter how many transactions you complete in the month or how much you deposit. It is based solely on your balance at the end of each business day.

7.

If you are paying a monthly fee to your financial institution for its services, you are paying a _______.

Maintenance fee

Per-check charge

Low-balance penalty fee

Maintenance fee. Maintenance fees are levied periodically on your account to compensate the institution for its services.

8.

What does the routing number on a check refer to?

The financial institution that issued the check

Your account

The check itself

All of the above

The financial institution that issued the check. The routing number is used for this purpose.

Test your knowledge

Choose wisely. There is only one correct answer to each question.