1. 4.00 Bluff 11 2 3 4 5 6 7 8 9 102345678910 1111 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 4412131415161718 19202122232425 26272829303132 33343536373839 4041424344

2. Ted deposits money in a savings plan regularly. The interest he earns on this plan is indicative of how the money markets are doing. Which savings plan is he using? Money market account

3. What term refers to how fast an investment can be turned into cash? Liquidity

4. Bob sells specialty guitars and hopes to exchange the guitars for a much higher value than the purchase price. Which type of investment could the guitars become? Collectibles

5. RadioShack offers shares of stock to investors at a consistent rate of 6% without any voting rights. What type of stock is it offering? Preferred

6. The city government needs 1.2 million dollars to build a new medical facility. Which type of bond investment opportunity would help the city government obtain funding for the facility? Municipal

7. Sam prefers a savings plan that allows him to earn interest on previously earned interest. Which type interest does he prefer? Compound

8. Mary prefers a relatively safe investment that will allow her to withdraw money after a few days without losing any of her principal. Which is the BEST investment choice for Mary? Money Market Account

9. How many votes do common stockholders get? One per share

10. Todd gave Intrek Computer Services a personal check for which his bank guaranteed payment. This is an example of which type of payment services? Certified check

11. Jack reviewed his company's budget for six months and determined that it is spending more on credit card purchases. Which type of budget was used? Operating

12. Direct Finance Company's primary function is to use its own money instead of customers' savings to provide loans to other businesses. This is an example of which type of financial institution? Non-depository

13. Harry's Grocery Store revenue for last year was $98,000 and it paid $103,000 in expenses. Which is the net income/net loss amount for the store? 5,000 net loss

14. Carl estimated that his business could invest an additional $40,000. Which type of budget was used? Cash

15. Phase of a business: Financial planning includes determining whether enough money is made to cover growth opportunities. Expansion

16. Budget used by a new business or during expansion of a business until profits are made. Start up

17. Budget used to estimate cash flow in and out of a business Cash

18. What’s the first step in creating a budget? Prepare a list of income and expense items.

19. What’s the last step in creating a budget? Clearly communicate the budget to key employees in order to make sound business decisions.

20. Checks that have not been deducted from the bank statement balance (they haven’t been cleared by the bank). Outstanding

21. What’s the first step in opening a checking account? Signing a signature card

22. This financial statement lists assets, liabilities, and owner’s equity. Balance sheet

23. This financial statement includes sales, expenses, and net profit or loss. Income statement

24. Type of ratio: Equals current assets/current liabilities Current ratio

25. Type of ratio: Shows how much the business relies on money borrowed externally versus money from within the business. Ideally, this ratio should be less than 2.0. Debt to equity ratio

26. Type of ratio: Equals net profit/owner’s equity Return on equity ratio

27. Type of ratio: Shows the amount of sales needed for each dollar of net income. While there is not an ideal ratio, managers use this number to compare to past periods to determine how changes in sales affect net income. Net income ratio

28. What are the 2 classifications of financial institutions? Depository and nondepository

29. Type of depository institution: not-for profit, serve their members only, and are owned by their depositors. Credit unions

30. Type of depository institution: offer many different services, including savings, loans, and checking accounts. Commercial banks

31. Type of financial institution: Earns money to finance their business by selling specific services such as policies, investments, and loans Non-depository

32. Name 2 types of non- depository institutions. Life insurance companies Investment companies Consumer finance companies Mortgage companies Check-cashing outlets Pawnshops

33. What does it mean to reconcile a bank statement? Make the check register (your records) equal the bank statement (bank’s records)

34. Anyone may cash a check with this type of endorsement. Blank

35. This type of endorsement transfers payment of a check to someone else. Special

36. This type of endorsement is the safest type of endorsement, as it cannot be cashed by a thief or someone who finds the check. Restrictive

37. What’s the last step in writing a check? Signing it

38. Which is the FIRST step in the check writing process? Writing the appropriate information in the check register

39. Which banks are required to join the Federal Reserve? National banks

40. How many districts are in the Federal Reserve? 12

41. Name 2 services provided by the Fed. Supervision of banks Participation of open market activities Acting as a clearinghouse Holding reserves Approving bank mergers Supplying paper currency Managing the discount rate

42. The Federal Reserve System aids in transferring funds between banks in North Carolina and New Jersey. This is an example of which service of the Federal Reserve System? Clearinghouse

43. Name 3 of the 7 services offered by financial institutions. Savings, payment, lending, electronic banking, storage of valuables, investment advice, management of trusts

44. What are liabilities? Money owed to others that must be paid back

45. How much does the FDIC insure up to per account? $250,000