Question 1

Existing regulations prohibit Internet banking activities unless the bank also operates a traditional brick-and-mortar facility.

Accepted Answer

Existing regulations do not universally prohibit internet-only banks; many operate without traditional branches, depending on the jurisdiction and specific regulations.

Question 2

An electronic funds transfer system EFT)is an electronic transaction system used for paying bills,making direct deposits of paychecks,and paying for a purchase.

Accepted Answer

An electronic funds transfer system (EFT) is indeed an electronic transaction system that allows for various types of payments, including paying bills, direct deposit, and payments for purchases.

Question 3

A newer product is the payroll debit card.It is cheaper for employers to load your paycheck on a debit card than to cut a check.This is convenient for customers who do not qualify for a regular debit or credit card,because they can use it to pay bills,do online purchasing and even get cash from an ATM machine.

Accepted Answer

This statement is true as payroll debit cards are a cheaper alternative for employers to pay their employees instead of cutting a check. These cards can be used for various purposes, including bill payments, online purchases, and ATM withdrawals.

Question 4

In an electronic funds transfer EFT)system,the information of a transaction is communicated from one computer to another.

Accepted Answer

In an electronic funds transfer (EFT) system, the information of a transaction is communicated electronically from one computer to another.

Question 5

GO-tags,a new product introduced by First Data,Inc.sports a small chip with a radio-transmitter that permits the user to tap a small card against a machine and transfer funds from the card to the vendor's account.

Accepted Answer

The description matches the functionality of GO-tags as introduced by First Data, Inc.

Question 6

They say "hindsight is 20/20",meaning,you can usually see things more clearly,with a much better understanding,after it has occurred.And,we can say the same for the recent banking crisis.The practices of several participants for-profit companies,government regulators,and customers)came together to create the situation that caused the collapse of several banks,financial services companies,and corporations.

Accepted Answer

The statement accurately explains the concept of hindsight being 20/20 and applies it to the banking crisis, pointing out that the actions of several groups contributed to the collapse of various companies.

Question 7

Although there are many features about online banking that customers do not care for,they are seldom concerned with the security due to continued assurances by the banking industry.

Accepted Answer

Customers are often concerned with the security of online banking despite assurances, as security breaches and cyber threats remain prevalent issues.

Question 8

Electronic fund transfer EFT)tools include debit cards,smart cards,direct deposit,direct payments,and electronic check conversion.

Accepted Answer

This statement is true. EFT tools include debit cards, smart cards, direct deposit, direct payments, and electronic check conversion.

Question 9

High startup costs cause Internet banks to have higher operating costs than traditional banks.

Accepted Answer

The answer of High startup costs cause Internet banks to...

Question 10

There is much speculation that prior to the recent banking crisis,the Fed Federal Reserve System)and the SEC Securities and Exchange Commission)were not enforcing the regulations they were charged to enforce.

Accepted Answer

Many analysts and experts believe that the Fed and SEC did not effectively enforce regulations leading up to the 2008 banking crisis.

Question 11

Cory worries that his $7,537 in a checking account at the Lottadoe National Bank could be lost if the bank fails.Lottadoe is a FDIC Federal Deposit Insurance Corporation)member bank,which insures Cory's account up to $250,000.

Accepted Answer

This statement is true. The FDIC insures deposits at member banks up to $250,000 per depositor, per account ownership category, in the event of bank failure. Therefore, Cory's $7,537 in a checking account at the Lottadoe National Bank is protected by FDIC insurance.

Question 12

A debit card is better than a credit card because it allows the purchaser to float a short-term loan,until the credit card company sends the bills at the end of the month.

Accepted Answer

A debit card does not allow the purchaser to float a short-term loan as it is linked to their own bank account and immediately deducts the funds from it at the time of purchase. A credit card, on the other hand, allows the purchaser to borrow money from the credit card company and pay it back later with interest.

Question 13

While credit cards increase the number of checks written,they lower the costs of processing those checks.

Accepted Answer

Credit cards reduce the number of checks written as they provide an alternative payment method, and they do not directly affect the costs of processing checks.

Question 14

Many employers offer direct deposit,as a convenient and cost savings method of distributing employee pay each month.

Accepted Answer

Direct deposit is a common and popular method of distributing employee pay as it offers convenience and cost savings for both employers and employees.

Question 15

Internet banks offer customers better interest rates and lower fees because these businesses avoid the costs of constructing and maintaining a bank building.

Accepted Answer

Internet banks do not have physical branches, which eliminates the need for maintaining a bank building, thereby cutting down on overhead costs. This allows them to offer better interest rates and lower fees to their customers.

Question 16

Credit cards and debit cards eliminate the paper handling processes of using checks.

Accepted Answer

The answer of Credit cards and debit cards eliminate the...

Question 17

Andrea has three types of deposits at her credit union.She has a checking account in her own name worth $32,000,a joint savings account with her husband,which currently holds $95,000,and an IRA account worth $125,449.Her deposits are at risk because they exceed the $250,000 limit on insurance coverage by NCU
A.

Accepted Answer

Andrea's deposits exceed the insurance coverage limit of $250,000, so they are at risk.

Question 18

From a bank's point of view,debit cards and credit cards are treated in identical ways.

Accepted Answer

The answer of From a bank's point of view,debit cards...

Question 19

Both checks and debit cards will immediately transfers funds from the customer's account to the seller's account.

Accepted Answer

The answer of Both checks and debit cards will immediately...

Question 20

After the bank failures of the Great Depression,the U.S.government formed three organizations: the FDIC Federal Deposit Insurance Corporation);the SAIF Savings Association Insurance Fund);and,NCUA National Credit Union Administration)to restore people's confidence and insure deposits.

Accepted Answer

This is true.

Quiz 20: Money,financial Institutions,and the Federal Reserve