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Progressive Finance Installment Loan

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					Name ____________________________________ Date _________________________


Banking/Finance - Final Exam Study Guide

Vocabulary:

asset                           central banks                              commercial banks
depositors                      depository intermediary                    deregulation
equity                          financial intermediary                     liability
liquid asset                    medium of exchange                         net income
niche market                    non-depository intermediary                profit
retail banks                    return on assets (ROA)                     return on equity (ROE)
spread                          annual percentage rate                     annual percentage yield
Certificate of Deposit          compound interest                          demand deposit
interest                        joint account                              money market account
passbook savings                right of survivorship                      statement savings
time deposit                    transaction account                        progressive
exemption                       regressive                                 tax evasion
itemize                         promissory note                            competent parties
express                         co-signer                                  implied
minimum payment                 retail stores                              finance companies
usury laws                      pawnbrokers                                line of credit
secured loan                    loan sharks                                finance charge
balance due

Check Your Understanding:

 Name 3 examples of a medium of exchange.
 What are the four functions that define a bank?
 What are the three different types of banks? Describe each one.
 What three factors in modern banking have changed the industry?
 What is a merger?
 How have mergers affected the banking industry?
 How has competition affected the banking industry?
 How does bank lending stimulate the economy?
 What does it mean when banks check to see if you are “creditworthy”?
 Explain the following statement: “For banks, deposits are liabilities”
 What are the equations used to calculate return on equity and return on assets?
 Give an example of a niche market.
 List 3 types of depository intermediaries. (pages 26 and 27)
 List 3 types of non-depository intermediaries. (pages 27 and 28)
 Name the most common form of a transaction account.



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 Name three types of time deposits.
 What is the difference between APR and APY?
 How is simple interest and compound interest calculated differently?
 Describe the following regulations:
        o   Regulation DD
        o   Regulation D
        o   Regulation CC
 What does it mean to have a maturity date? Can you withdraw your money out of a CD before the
    maturity date? If so, are you charged any penalties or fees?
 Explain the difference between progressive, regressive and proportional taxes.
 Examples of each
 What the IRS is and what services/actions they perform?
 Who has the power to tax?
 List the different types of filing status for tax returns and how each status affects how much tax you
    pay.
 Provide some examples of exemptions.
 Describe deductions and itemizing.
 How does financial planning help you?
 Compare and contrast fixed and variable expenses
 Net Worth Statement
 What is included
 Solvent vs. Insolvent
 Personal Property Inventory
 What is included
 Purpose of statement
 List and describe the different kinds of contracts.
 What are the 4 elements of enforceable contracts?
 Advantages and disadvantages of using credit
 Two kinds of open-ended credit
 Difference between installment (closed-end) and open-ended credit
 Seven major sources of credit
 Difference between sales finance and consumer finance



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 Be able to describe why credit unions and finance companies charge different interest rates (higher
   or lower) for their products
 Describe situations when you would use collateral when making a purchase on credit




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