PFP Exam 2 Questions and Answers Latest Update 2025 Already Passed
Financial conglomerates, such as: - Answers Citi group offers a diverse set of financial services including
accepting deposits
Some of the banking services offered by financial institutions are: - Answers reconciling your account
balance
Monitoring your account balance
electronic checking
What is the difference between a debit card and a credit card? - Answers A credit card allows you to
purchase goods and services on credit, within your credit limits. If you do not pay off your entire balance
each month, you will incur a finance charge. When you use a debit card, payment comes directly from
your checking account. There is no finance charge and you are limited only by the funds available in your
bank account.
Steve just received his first paycheck and wants to open a checking account. There are five banks in his
hometown. What factors should Steve consider when choosing a bank? - Answers per check charges
service charges
atm use charges
What effect would a general change in current interest rates have on you as a depositor or borrower? -
Answers receive a higher interest rate
Why is it important to reconcile your account balance every month? - Answers -to find a bank error. The
sooner you discover the error, the easier it will be to have it corrected.
-to track your spending to determine exactly where you spend your money.
-to verify all transactions, including debit card transactions.
Electronic banking has: - Answers reduced float to zero in some instances since the funds are typically
instantly withdrawn from your account.
Some advantages to paying bills online are - Answers -it is a good way to keep more accurate records
since your financial institution maintains electronic records of all transactions.
Your answer is correct.
,-can be set up to pay your bills automatically so you do not forget to pay a bill on time or miss a
payment.
-eliminates the need to mail a check so you save on postage and the cost of checks.
Your answer is correct.
-saves a lot time since all you have to do is enter an amount after selecting the appropriate recipient.
Jason wants to open a checking account with a
$100deposit. Jason believes he will write
15checks per month and use other banks' ATMs eight times a month. He will not be able to maintain a
minimum balance. Which bank should Jason choose? - Answers Hillsboro Bank
The break-even number of checks is the difference between the monthly fees at the two banks divided
by the per-check charge at Sun Coast Bank. For South Trust Bank to be the better option, Randy would
need to write at least 1 more check than the breakeven number.
OK - Answers
Randy, a student, has
$500
to deposit in a new chequing account, but Randy knows he will not be able to maintain a minimum
balance. He will not use an ATM card, but will write a large number of cheques. Randy is trying to
choose between the unlimited check writing offered by South Trust and the low per-check fee offered
by Sun Coast. How many checks would Randy have to write each month for the account at South Trust
to be the better option? - Answers 18 (look above for instructions)
Jill just finished reconciling her account balance and discovered the bank made a $575 error in her favor.
She double-checked her numbers and is certain the bank made an error, and the difference is not a
miscalculation on her part. Jill knows the amount is miniscule to the bank's overall value but it would
help her make a payment that is due this month. Should she just let the bank find the error and use the
money until that time? Or, should she report it now?
a. What should Jill do now that she has discovered the error?
,b. Why is it important to notify someone of a financial math error? - Answers a. Jill should report the
error immediately and not use the funds.
b. In this case, the money is not Jill's money so the ethical action is to report it. If the error was against
Jill, she should also notify the bank to get what is rightfully her money placed back into her account.
You have $3,000 that you may need any day to replace the furnace in your house. Which of the
following would be the best place to put the $3,000? - Answers A savings account earning 2%
instalment Credit - Answers is issued for specific purchases but gives the borrower a longer time to
repay the loan
What is an advantage of using credit? - Answers The appropriate use of credit helps build a good credit
score
Why should some people use cash to make purchases instead of credit? - Answers Using a credit card
instead of cash causes some people to overspend. These people are better off using cash for most
purchases.
The Equal Credit Opportunity Act prohibits that credit be denied due to all of the following reasons
except: - Answers education
If you are denied credit, do you have the right to know the reason for the denial? - Answers Yes, the
applicant must be notified with the reason within 30 days of the denial of a credit application.
A weak credit report can affect you because: - Answers income and expenses are reviewed to determine
how much is left to service added debt.
The three major credit bureaus are: - Answers Equifax, Experian, and Trans Union.
They score your credit rating based on: - Answers FICO for credit scoring, which is based on payment
history and levels of debt.
The three major credit bureaus: - Answers may produce a different score because the information each
bureau receives on the credit applicant may vary.
Which of the following is not one of the six major areas of information that may be included on your
credit report? - Answers marital status
One of the factors is used to determine your credit score and how it is weighted by FICO is: - Answers
Payment history is weighted at 35
percent.
, One of the factors is used to determine your credit score and how it is weighted by FICO is: - Answers
Length of creditor relationship and number of inquiries
is weighted at
15
percent.
What are some common types of credit? - Answers Common types of credit include credit cards, auto
loans, mortgages, or other loans.
1.Shoulder Surfing
2.Dumpster Diving
3.Pretexting
4.Skimming
5. Phishing - Answers 1.stand over the shoulder of the victim and read the credit card number.
2.go through the trash and take personal information that contains identifying numbers
3. obtain personal information under false pretenses by posing as a survey taker
4.copy the information contained in the magnetic stripe on the credit or debit card and use it to create
fake cards
5. a type of pretexting
Which of the following is not a step you can take to safeguard your personal information? - Answers do
not give out your cellphone number
Financial conglomerates, such as: - Answers Citi group offers a diverse set of financial services including
accepting deposits
Some of the banking services offered by financial institutions are: - Answers reconciling your account
balance
Monitoring your account balance
electronic checking
What is the difference between a debit card and a credit card? - Answers A credit card allows you to
purchase goods and services on credit, within your credit limits. If you do not pay off your entire balance
each month, you will incur a finance charge. When you use a debit card, payment comes directly from
your checking account. There is no finance charge and you are limited only by the funds available in your
bank account.
Steve just received his first paycheck and wants to open a checking account. There are five banks in his
hometown. What factors should Steve consider when choosing a bank? - Answers per check charges
service charges
atm use charges
What effect would a general change in current interest rates have on you as a depositor or borrower? -
Answers receive a higher interest rate
Why is it important to reconcile your account balance every month? - Answers -to find a bank error. The
sooner you discover the error, the easier it will be to have it corrected.
-to track your spending to determine exactly where you spend your money.
-to verify all transactions, including debit card transactions.
Electronic banking has: - Answers reduced float to zero in some instances since the funds are typically
instantly withdrawn from your account.
Some advantages to paying bills online are - Answers -it is a good way to keep more accurate records
since your financial institution maintains electronic records of all transactions.
Your answer is correct.
,-can be set up to pay your bills automatically so you do not forget to pay a bill on time or miss a
payment.
-eliminates the need to mail a check so you save on postage and the cost of checks.
Your answer is correct.
-saves a lot time since all you have to do is enter an amount after selecting the appropriate recipient.
Jason wants to open a checking account with a
$100deposit. Jason believes he will write
15checks per month and use other banks' ATMs eight times a month. He will not be able to maintain a
minimum balance. Which bank should Jason choose? - Answers Hillsboro Bank
The break-even number of checks is the difference between the monthly fees at the two banks divided
by the per-check charge at Sun Coast Bank. For South Trust Bank to be the better option, Randy would
need to write at least 1 more check than the breakeven number.
OK - Answers
Randy, a student, has
$500
to deposit in a new chequing account, but Randy knows he will not be able to maintain a minimum
balance. He will not use an ATM card, but will write a large number of cheques. Randy is trying to
choose between the unlimited check writing offered by South Trust and the low per-check fee offered
by Sun Coast. How many checks would Randy have to write each month for the account at South Trust
to be the better option? - Answers 18 (look above for instructions)
Jill just finished reconciling her account balance and discovered the bank made a $575 error in her favor.
She double-checked her numbers and is certain the bank made an error, and the difference is not a
miscalculation on her part. Jill knows the amount is miniscule to the bank's overall value but it would
help her make a payment that is due this month. Should she just let the bank find the error and use the
money until that time? Or, should she report it now?
a. What should Jill do now that she has discovered the error?
,b. Why is it important to notify someone of a financial math error? - Answers a. Jill should report the
error immediately and not use the funds.
b. In this case, the money is not Jill's money so the ethical action is to report it. If the error was against
Jill, she should also notify the bank to get what is rightfully her money placed back into her account.
You have $3,000 that you may need any day to replace the furnace in your house. Which of the
following would be the best place to put the $3,000? - Answers A savings account earning 2%
instalment Credit - Answers is issued for specific purchases but gives the borrower a longer time to
repay the loan
What is an advantage of using credit? - Answers The appropriate use of credit helps build a good credit
score
Why should some people use cash to make purchases instead of credit? - Answers Using a credit card
instead of cash causes some people to overspend. These people are better off using cash for most
purchases.
The Equal Credit Opportunity Act prohibits that credit be denied due to all of the following reasons
except: - Answers education
If you are denied credit, do you have the right to know the reason for the denial? - Answers Yes, the
applicant must be notified with the reason within 30 days of the denial of a credit application.
A weak credit report can affect you because: - Answers income and expenses are reviewed to determine
how much is left to service added debt.
The three major credit bureaus are: - Answers Equifax, Experian, and Trans Union.
They score your credit rating based on: - Answers FICO for credit scoring, which is based on payment
history and levels of debt.
The three major credit bureaus: - Answers may produce a different score because the information each
bureau receives on the credit applicant may vary.
Which of the following is not one of the six major areas of information that may be included on your
credit report? - Answers marital status
One of the factors is used to determine your credit score and how it is weighted by FICO is: - Answers
Payment history is weighted at 35
percent.
, One of the factors is used to determine your credit score and how it is weighted by FICO is: - Answers
Length of creditor relationship and number of inquiries
is weighted at
15
percent.
What are some common types of credit? - Answers Common types of credit include credit cards, auto
loans, mortgages, or other loans.
1.Shoulder Surfing
2.Dumpster Diving
3.Pretexting
4.Skimming
5. Phishing - Answers 1.stand over the shoulder of the victim and read the credit card number.
2.go through the trash and take personal information that contains identifying numbers
3. obtain personal information under false pretenses by posing as a survey taker
4.copy the information contained in the magnetic stripe on the credit or debit card and use it to create
fake cards
5. a type of pretexting
Which of the following is not a step you can take to safeguard your personal information? - Answers do
not give out your cellphone number
