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Income Beginner: Introduction to Deposit Accounts

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1.
The higher the interest/dividend rate paid, the higher the minimum balance a deposit account usually requires.
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True. The tradeoff for higher earnings rates is letting the financial institution hold more of your money.
2.
Which of the following is a reason an investor might open a deposit account?
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All of the above. Investors open deposit accounts for all of these reasons.
3.
All of the following are advantages of deposit accounts except _______.
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High rates of return. High rates of return are not an advantage of deposit accounts, which typically pay lower returns than other investment opportunities.
4.
All of the following are advantages of asset management accounts, except _______.
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Low minimum balances. Low minimum balances are not a feature of asset management accounts.
5.
An account that combines savings, checking, credit/debit card services, and a line of credit in one account is a(n) _______.
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Asset management account. An asset management account combines many banking and investment features in one account.