2019-20 Lesson#1 Banking 101 TEST (pds 1, 7)

What of the following is true? Bank... (more than 1 answer)

• is a financial institution

• is a financial intermediary

• is a private business and is not regulated

• connects customers that have capital deficits to customers with capital surpluses

• accepts deposits and channels those deposits into lending activities

Which types of banks can you name? (more than one answer)

• Central bank

• Investment bank

• Non-profit bank

• Commercial bank

What are the functions of commercial banks? (more than one answer)

• maintain record of Government revenue and expenditure

• determine foreign exchange rates

• exchange foreign currencies

• receive deposits

• give loans

What functions have the merchant banks? (more than one answer)

• raise funds for industry on the various financial markets

• determine foreign exchange rates

• finance international trade

• receive deposits

What are the main functions implemented by the Central bank? (4)

• It prints the national currency and determines foreign exchange rates

• it advises the Government on monetary and credit policies and maintains record of Government revenue and expenditure

• offer stockbroking and portfolio management services to rich corporate and individual clients

• it decides on the interest rates for bank deposits and bank loans

• maintain deposit accounts of all other banks and advances money to other banks, when needed

What differs merchant bank from commercial one? (one answer)

• Merchant banks work mainly with the government

• Merchant banks work mainly with individuals

• Merchant banks deal mainly with businesses

• Merchant banks deal mainly with commercial banks

What are the main types of deposits? (more than one answer)

• Current Deposit

• Interest Deposit

• Fixed deposit

• Savings deposit

What is the difference between current and fixed deposit? (one answer)

• Current deposit is only for small sums of money

• Fixed deposits can be withdrawn any time, but current deposits can not

• Current deposits can be withdrawn any time, but fixed deposits can not

What types of loans do you know? (more than one answer)

• Savings

• Cash credit

• overdraft

• current

• Mortage

What are the primary functions of commercial banks? (more than one)

• accepting deposits

• collection of checks

• granting loans

• foreign exchange