AnswersFinancial Math - MA2007 CRChecking Accounts

Government Agencies Answers

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1
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Where does the FDIC’s reserve fund come from?

A
The FDIC has access to federal tax revenue.
B
If an insured bank fails, the FDIC keeps the money at that bank that is beyond the insured limit.
C
A certain amount of money goes directly from the Treasury to the FDIC’s reserve fund.
D
Insured banks pay a premium on the money insured.
2
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Which of the following government agencies does not regulate banking or financial markets?

A
The NCUA
B
The Federal Reserve
C
The FCC
D
The OCC
3

If the FDIC has an insurance fund of $67.8 billion and must use 7.6% of it to cover several failed banks, approximately how much money is left in the fund?

A
$5,153 million
B
$57.49 billion
C
$72.95 billion
D
$62.65 billion
4

In 2007, the FDIC’s insurance limit was $100,000 per person per bank. If Sam had a $150,000 savings account and $80,000 checking account at Bank J, a $95,000 money market account at Bank K, and a $200,000 savings account at Bank L, how much of Sam’s money was FDIC insured?

A
$295,000
B
$300,000
C
$375,000
D
$525,000
5

What does “FDIC” stand for?

A
Financial Deposit Institute of Congress
B
Financial Deposit Insurance Commission
C
Federal Deposit Investigation Council
D
Federal Deposit Insurance Corporation
6

Which of these indicates that a bank is likely to be answerable to the Office of the Comptroller of the Currency?

A
The bank lists the initials “NA” after its name.
B
The bank has the word “Federal” in its name.
C
The bank is qualified to give loans.
D
The bank is owned by the government.
7

Which of the following is not protected by the FDIC?

A
Safety deposit boxes
B
Savings accounts
C
Checking accounts
D
Certificates of Deposit (“CDs”)
8

Rex has several hundred thousand dollars to save, and he wants to keep it as safe as possible. What would you recommend Rex do to keep his money safe?

A
Deposit the money in a bank, ideally in a single well-protected account.
B
Deposit the money in a bank, but in several different accounts.
C
Deposit the money in several banks, not putting too much money in any one.
D
Keep the physical cash at home in a fireproof safe.
9

Why is it important to choose a bank that is a member of the FDIC?

A
The FDIC is the regulatory body that licenses banks, so a non-FDIC bank is illegal.
B
The FDIC is a union that prevents banks from taking advantage of customers, so you will receive better service with an FDIC bank.
C
The FDIC is a government bureau that insures the money that customers deposit in the bank, so your money is safer in an FDIC bank.
D
Only FDIC banks are legally allowed to issue loans, so if you ever anticipate needing a loan, you will need to use an FDIC bank.
10

If the FDIC charges Bank E 2.4 cents per 100 dollars insured, how much must Bank E pay to insure $4.8 million in deposits?

A
$1,152
B
$115,200
C
$2,112
D
$211,200
11

In 2007, the FDIC’s insurance limit was $100,000 per person per bank. Approximately 62% of Gil’s deposits were insured by the FDIC. Which of the following was a possible setup for Gil’s deposits?

A
A $13,000 money market account at Bank T; a $31,000 CD, $44,000 savings account, and $16,000 checking account at Bank U; a $70,000 CD and $28,000 money market account at Bank V
B
A $54,000 checking account and $84,000 savings account at Bank T; a $28,000 money market account, $27,000 savings account, and $20,000 CD at Bank U; a $130,000 CD at bank V
C
A $60,000 money market account and $70,000 savings account at Bank T; a $40,000 checking account and $92,000 savings account at Bank U; a $45,000 CD and $75,000 checking acount at Bank V
D
A $108,000 savings account and $46,000 CD at Bank T; a $36,000 money market account and $38,000 CD at Bank U; a $63,000 checking account, $80,000 savings account, and $70,000 money market account at Bank V
12

Which of the following statements about the NCUA is correct?

A
The NCUA is similar to the FDIC, but it insures credit unions instead of banks.
B
The NCUA is an independent coalition of credit unions that works to protect investors.
C
The NCUA is the branch of the FDIC that insures credit unions.
D
The NCUA controls the amount of money banks have available to lend out.
13

In 2007, the FDIC’s insurance limit was $100,000 per person per bank. Approximately 62% of Gil’s deposits were insured by the FDIC. Which of the following was a possible setup for Gil’s deposits?

A
A $13,000 money market account at Bank T; a $31,000 CD, $44,000 savings account, and $16,000 checking account at Bank U; a $70,000 CD and $28,000 money market account at Bank V
B
A $54,000 checking account and $84,000 savings account at Bank T; a $28,000 money market account, $27,000 savings account, and $20,000 CD at Bank U; a $130,000 CD at bank V
C
A $60,000 money market account and $70,000 savings account at Bank T; a $40,000 checking account and $92,000 savings account at Bank U; a $45,000 CD and $75,000 checking acount at Bank V
D
A $108,000 savings account and $46,000 CD at Bank T; a $36,000 money market account and $38,000 CD at Bank U; a $63,000 checking account, $80,000 savings account, and $70,000 money market account at Bank V
14

If the NCUA charges 6.3 cents per 100 dollars insured and Credit Union L pays $8,445 in NCUA insurance premiums, approximately how much is in Credit Union L’s insured deposits?

A
$1.2 million
B
$5.3 million
C
$13.4 million
D
$20.6 million
15

What is the purpose of the Electronic Funds Transfer Act?

A
It limits your liability if your ATM card is stolen.
B
It limits the amount of money that can be electronically transferred between two bank accounts in one day.
C
It monitors the amount of money that banks transfer electronically.
D
It charges a tax on money transferred electronically.
16

If the NCUA pays $1.92 billion to cover several failed credit unions, and doing so drains its reserve fund by 8.42%, approximately how much was in the fund to begin with?

A
$24.7 billion
B
$22.8 billion
C
$20.9 billion
D
$19.0 billion
17

Rex has several hundred thousand dollars to save, and he wants to keep it as safe as possible. What would you recommend Rex do to keep his money safe?

A
Deposit the money in a bank, ideally in a single well-protected account.
B
Deposit the money in a bank, but in several different accounts.
C
Deposit the money in several banks, not putting too much money in any one.
D
Keep the physical cash at home in a fireproof safe.
18

If the FDIC has an insurance fund of $67.8 billion and must use 7.6% of it to cover several failed banks, approximately how much money is left in the fund?

A
$5,153 million
B
$57.49 billion
C
$72.95 billion
D
$62.65 billion
19

Which of the following is not a way in which the Federal Reserve (“the Fed”) and its policies affect banks?

A
The Fed sets a maximum on the interest rates banks can charge for loans or credit.
B
The Fed’s required reserve policy limits how much money banks can lend out.
C
The Fed determines at what price banks must lend money to one another.
D
The Fed serves as “the bank’s bank,” lending other banks money when necessary.

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