Banking Basics

Ready to test your knowledge? You'll have ten multiple choice questions to answer. Click on each question to reveal the question and multiple choice answers. After you've completed answering all ten questions, click "Grade Me!" at the end of the quiz to see how you did.

Question 1

Which of these compounding methods will grow your savings balance the quickest?

(A) Daily compounding	Correct Incorrect
(B) Monthly compounding	Correct Incorrect
(C) Quarterly compounding	Correct Incorrect
(D) Annual compounding	Correct Incorrect

Question 2

Which of the following will not deduct money from your bank account directly?

(A) An ATM	Correct Incorrect
(B) A credit card	Correct Incorrect
(C) A debit card	Correct Incorrect
(D) A check	Correct Incorrect

Question 3

Money held in a bank or credit union is insured by the:

(A) Federal Deposit Insurance Corporation (FDIC)	Correct Incorrect
(B) National Credit Union Association (NCUA)	Correct Incorrect
(C) Either the FDIC or NCUA, depending on what type of institution your money is in.	Correct Incorrect
(D) Fannie Mae	Correct Incorrect

Question 4

When would you choose a money market account over a savings account?

(A) When you would like to occasionally write a check to withdraw funds.	Correct Incorrect
(B) When you'd like to receive a higher annual percentage yield (APY) in exchange for a larger minimum deposit.	Correct Incorrect
(C) You already have a significant amount of money saved.	Correct Incorrect
(D) All of the above.	Correct Incorrect

Question 5

What do the 9 digits in the lower left hand corner of your checks represent?

(A) Your account number.	Correct Incorrect
(B) The check number.	Correct Incorrect
(C) Security code.	Correct Incorrect
(D) The routing number for your bank or credit union.	Correct Incorrect

Question 6

Which of the following would you not do when implementing a "laddering strategy" for Certificates of Deposits (or Certificate) accounts?

(A) Break your total savings up into smaller, equal amounts.	Correct Incorrect
(B) Place equal amounts into different CDs of varying terms.	Correct Incorrect
(C) When each CD matures,reinvests the proceeds in a new long-term certificate.	Correct Incorrect
(D) Place all of your money in the longest term, highest yield CD you can find.	Correct Incorrect

Question 7

The delay that occurs between the time a check is written and the money is deducted from your account is known as:

(A) Maturity	Correct Incorrect
(B) Float	Correct Incorrect
(C) Overdraft	Correct Incorrect
(D) Amortization	Correct Incorrect

Question 8

APY stands for what?

(A) Average Percentage Yield	Correct Incorrect
(B) Annual Percentage Yield	Correct Incorrect
(C) Average Payment Yearly	Correct Incorrect
(D) Average Power Yielded	Correct Incorrect

Question 9

The interest rate used as an index in calculating rate changes to adjustable rate mortgages (ARM) and other variable rate short term loans is known as the:

(A) Federal Funds Rate	Correct Incorrect
(B) Margin Rate	Correct Incorrect
(C) Index Rate	Correct Incorrect
(D) Prime Rate	Correct Incorrect

Question 10

Which of the following statements are true regarding Overdraft Protection?

(A) Links your checking account to another account and automatically transfers funds to checking when it doesn't have enough money to cover your transactions.	Correct Incorrect
(B) You typically pay for Overdraft Protection only when you use the service.	Correct Incorrect
(C) You have the right to decline Overdraft Protection and to have any transactions rejected when there are insufficient funds in your account to cover it.	Correct Incorrect
(D) All of the above.	Correct Incorrect

	Correct	Incorrect
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Question 2
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Question 7
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Question 10

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