PFIN Test 2 Chapter 4 Questions
with All Correct Answers
A check you issued last week has been stolen. You can prevent the amount on the
check from being withdrawn from your account by an unauthorized person by:
a. writing a new check.
b. depositing the correct amount of money.
c. requesting a stop payment.
d. tearing up the check.
e. properly endorsing the check. - Answer-c
When doing an account reconciliation, interest earned on your account should be:
a. deducted from your checkbook ledger.
b. added to your checkbook ledger.
c. ignored because the bank has already recorded it.
d. listed as outstanding.
e. treated like a loan. - Answer-b
A check you wrote to buy shoes last week has not yet been approved by the bank. It is
said to be:
a. outstanding.
b. credited.
c. endorsed.
d. certified.
e. deposited. - Answer-a
You are going on an overseas trip, and you want to carry checks. You should purchase:
a. cashier's checks.
b. certified checks.
c. conditional checks.
d. traveler's checks.
e. guaranteed checks. - Answer-d
Mary has calculated her adjusted balance as $500. She notices that her bank's service
charges are $20 for this period. Mary's ending balance in her bank account is:
a. $520.
b. $480.
c. $600.
, d. $500.
e. $510. - Answer-b
The more frequently a bank compounds interest, _____ for a given nominal rate will be.
a. the higher the stated interest rate
b. the lower the inflation rate
c. the higher the effective rate
d. the lower the yield rate
e. the higher the normal rate - Answer-c
A lump-sum deposit of $8,000 left in a bank for 12 years at 9%, compounded annually,
will result in an ending balance of: (Select the closest answer.)
a. $11,600.
b. $16,640.
c. $22,504.
d. $52,938.
e. $96,000. - Answer-c
Harry received a scholarship of $2,000. He plans to invest this money for 5 years at 8%,
compounded annually. If he accomplishes this, Harry will have an ending balance of:
(Use time value tables or a financial calculator. Select the closest answer.)
a. $2,160.
b. $2,520.
c. $2,608.
d. $2,938.
e. $3,162. - Answer-d
At maturity, a deposit of $6,000 in a certificate of deposit (CD) for 10 years at 3% will be
worth: (Select the closest answer.)
a. $7,340.
b. $7,800.
c. $8,064.
d. $8,678.
e. $9,005. - Answer-c
John Anderson deposited $10,000 in a certificate of deposit (CD) for 3 years at 5%. At
maturity, it will be worth: (Use time value tables or a financial calculator. Select the
closest answer.)
a. $10,500.
b. $10,725.
c. $11,400.
d. $11,580.
e. $12,400. - Answer-d
The minimum denomination of T-bills is:
a. $25.
with All Correct Answers
A check you issued last week has been stolen. You can prevent the amount on the
check from being withdrawn from your account by an unauthorized person by:
a. writing a new check.
b. depositing the correct amount of money.
c. requesting a stop payment.
d. tearing up the check.
e. properly endorsing the check. - Answer-c
When doing an account reconciliation, interest earned on your account should be:
a. deducted from your checkbook ledger.
b. added to your checkbook ledger.
c. ignored because the bank has already recorded it.
d. listed as outstanding.
e. treated like a loan. - Answer-b
A check you wrote to buy shoes last week has not yet been approved by the bank. It is
said to be:
a. outstanding.
b. credited.
c. endorsed.
d. certified.
e. deposited. - Answer-a
You are going on an overseas trip, and you want to carry checks. You should purchase:
a. cashier's checks.
b. certified checks.
c. conditional checks.
d. traveler's checks.
e. guaranteed checks. - Answer-d
Mary has calculated her adjusted balance as $500. She notices that her bank's service
charges are $20 for this period. Mary's ending balance in her bank account is:
a. $520.
b. $480.
c. $600.
, d. $500.
e. $510. - Answer-b
The more frequently a bank compounds interest, _____ for a given nominal rate will be.
a. the higher the stated interest rate
b. the lower the inflation rate
c. the higher the effective rate
d. the lower the yield rate
e. the higher the normal rate - Answer-c
A lump-sum deposit of $8,000 left in a bank for 12 years at 9%, compounded annually,
will result in an ending balance of: (Select the closest answer.)
a. $11,600.
b. $16,640.
c. $22,504.
d. $52,938.
e. $96,000. - Answer-c
Harry received a scholarship of $2,000. He plans to invest this money for 5 years at 8%,
compounded annually. If he accomplishes this, Harry will have an ending balance of:
(Use time value tables or a financial calculator. Select the closest answer.)
a. $2,160.
b. $2,520.
c. $2,608.
d. $2,938.
e. $3,162. - Answer-d
At maturity, a deposit of $6,000 in a certificate of deposit (CD) for 10 years at 3% will be
worth: (Select the closest answer.)
a. $7,340.
b. $7,800.
c. $8,064.
d. $8,678.
e. $9,005. - Answer-c
John Anderson deposited $10,000 in a certificate of deposit (CD) for 3 years at 5%. At
maturity, it will be worth: (Use time value tables or a financial calculator. Select the
closest answer.)
a. $10,500.
b. $10,725.
c. $11,400.
d. $11,580.
e. $12,400. - Answer-d
The minimum denomination of T-bills is:
a. $25.
