Banking today Lesson

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How are most banks established?

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As partnerships

As sole proprietorships

As corporations

As cooperatives

Multiple Choice

What is a corporation?

• A form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual

• A form of business organization where the owner is personally liable for all debts

• A form of business organization that does not have the right to enter into legal contracts

• A form of business organization that cannot be sued

Multiple Choice

What is a stock in the context of a corporation?

• A. A loan given to a corporation

• B. A certificate of ownership in a corporation

• C. A type of bond issued by a corporation

• D. A form of corporate tax

Dropdown

Who becomes part owners of a corporation by purchasing stock?

Select answer

Multiple Choice

What is a shareholder?

• A. A person who lends money to a corporation

• B. A person who owns a share or shares of stock in a corporation

• C. A person who manages the corporation

• D. A person who audits the corporation's finances

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Who is responsible for a corporation's debt?

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A. The shareholders

B. The employees

C. The corporation itself

D. The government

Multiple Choice

What is a State-Chartered Bank?

• A bank that receives its charter from the federal government

• A bank that receives its charter from the state in which it operates

• A bank that operates internationally

• A bank that does not accept deposits

Drag and Drop

What can new banks offer to attract deposits?

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Stocks

Bonds

Certificates of Deposit (CDs)

Mutual Funds

Dropdown

What must be competitive for a bank to attract deposits?

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Multiple Choice

What is a Certificate of Deposit (CD)?

• A receipt showing that an investor has made an interest-bearing loan to a financial institution

• A document showing ownership of a company's stock

• A certificate for a bank's savings account

• A bond issued by the government

Drag and Drop

What is the reserve requirement if a bank receives a $1000 deposit and is subject to a 20% reserve requirement?

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$200

$800

$1000

$500

Drag and Drop

How much is the bank free to lend if it receives a $1000 deposit and is subject to a 20% reserve requirement?

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$200

$800

$1000

$500

Multiple Choice

What is the purpose of the reserve requirement?

• To determine the amount of money a bank can lend

• To compute the amount of a depository institution’s required reserves

• To calculate the interest rate for loans

• To set the maximum deposit limit for customers

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What do banks report to the Feds regularly?

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Their profits and losses

Their reserves and demand deposits

Their loan interest rates

Their customer satisfaction scores

Dropdown

Which type of bank account allows you to make purchases in any amount up to the limit of your deposit?

Select answer

Drag and Drop

What is one advantage of using a debit card over a paper check?

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Debit cards have higher transaction limits

Debit cards offer better interest rates

Money is transferred immediately with debit cards

Debit cards can be used internationally

Dropdown

What is a characteristic of savings accounts and time deposits?

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Dropdown

Which of the following is a service offered by banks that allows borrowing money directly from the bank and paying back with interest?

Select answer

Multiple Choice

What is a smart card?

• A card that allows borrowing money directly from the bank

• A card similar to a credit card but with a built-in microprocessor

• A system that uses computer and electronic technology in place of paper transactions

• A card used only for online purchases

Multiple Choice

What does electronic funds transfer (EFT) refer to?

• Borrowing money directly from the bank

• A card similar to a credit card but with a built-in microprocessor

• Any system that uses computer and electronic technology in place of paper transactions

• A method of depositing physical checks