1. Typically, ______ the risk of an investment and _________ the risk of the institution, the ________ interest is paid on the investment.

lower; lower; higher

higher; lower; lower

lower; higher; lower

lower; lower; lower

2. You have implemented a new budget, but after tracking your spending for the last two months, you find that you have spent more than budgeted on clothing and utilities. This is called a budget

subsidy.

disaster.

variance.

reconciliation.

3. If you examine your bank statement and notice several large charges to your account that you did not make, its likely

overdraft fees.

identity theft.

interest charge for debit card.

automated bill payments.

4. What is not a cost of keeping money in a checking account?

FDIC insurance

Fees for various services like stop payments

Transaction fee for ATM transaction

Minimum balance requirement for free checking

5. You have estimated that you need $6,500 in liquid assets for an emergency fund. You currently have only $1,000, which is invested in a savings account earning 3 percent nominal interest, compounded monthly. Your current budget leaves $290 per month to apply to this goal. If you plan to add this money to your savings at the end of every month, how much will you have after one year? (Round answer to 0 decimal places, e.g. 1,250.)