The Truth in Savings Act Requires Financial Institutions to Disclose

question 61

Multiple Choice

The Truth in Savings Act requires financial institutions to disclose the _____ on savings accounts.

• A) annual percentage yield (APY)
• B) compounding
• C) liquidity
• D) tax rate
• E) safety certification

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Definitions:

Par

The face value of a bond or stock, representing the amount the issuer agrees to pay at maturity (for bonds) or the value attributed to a share for accounting purposes.

Market Rate

The prevailing interest rate that is available in the marketplace for loans or investments of a similar risk level and maturity.

Present Value Tables

Tables that provide the factors required to calculate the present value of future cash flows or income.

Semiannually

Occurring or payable twice each year.