Questions from Personal Finance

Q: Name some special services that banks provide. How might you make

Name some special services that banks provide. How might you make use of them?

Q: Casey has $1,000 to invest in a certificate of

Casey has $1,000 to invest in a certificate of deposit. Her local bank offers her 2.5% on a 12-month FDIC-insured CD. A nonfinancial institution offers her 5.2% on a 12-month CD. What is the risk pre...

Q: Mike, a recent college graduate, opened a checking account with

Mike, a recent college graduate, opened a checking account with a local bank. He asked numerous questions before deciding on this bank, including inquiring about checking account fees and annual credi...

Q: What is a risk-free rate? Give an example of

What is a risk-free rate? Give an example of an investment with a risk-free rate. Why is there no risk?

Q: What is a risk premium? Who might take advantage of it

What is a risk premium? Who might take advantage of it?

Q: List and describe the four main types of nondepository financial institutions.

List and describe the four main types of nondepository financial institutions.

Q: Where do financial institutions obtain funds for making loans? How are

Where do financial institutions obtain funds for making loans? How are the interest rates for loans determined? Are the interest rates the same for all borrowers? Why or why not?

Q: What effect would a general change in current interest rates have on

What effect would a general change in current interest rates have on you as a depositor or borrower?

Q: In considering investments with different degrees of risk, what two factors

In considering investments with different degrees of risk, what two factors will influence an investor’s decision? What is an appropriate investment for an individual who needs funds in a short period...

Q: What is the term structure of interest rates? Why is this

What is the term structure of interest rates? Why is this concept important to an investor?