Banking Quiz

What is the gold standard?

• A system where banks primarily serve individual customers and small businesses

• A financial system in which banks are required to hold only a fraction of their customers deposits in reserve

• A type of bank that specializes in capital markets activities and advisory services

• A monetary system where the value of a country's currency is directly linked to a fixed quantity of gold

What is the primary advantage of fractional reserve banking?

• Connecting borrowers and savers in the economy

• Increased shareholder value

• Stability and regulation of banking systems

• Economic growth by increasing the money supply

What is a disadvantage of fractional reserve banking?

• Bank runs

• Financial intermediation

• Inflation

• Excessive risk-taking

What type of bank primarily serves individual customers and small businesses?

• Central banks

• Commercial banks

• Investment banks

• Retail banks

What type of bank provides loans and lines of credit to businesses?

• Commercial banks

• Retail banks

• Investment banks

• Central banks

What type of bank advises clients on corporate transactions such as mergers and acquisitions?

• Retail banks

• Commercial banks

• Investment banks

• Central banks

What is the primary role of central banks?

• To facilitate efficient price discovery in financial markets

• To provide cash management services

• To manage portfolios of securities and other financial assets

• To oversee the nation's money supply and monetary policy

What is one of the primary tasks of a central bank?

• To manage the nation's money supply

• To act as market makers in securities trading

• To provide trade finance services

• To increase liquidity and stimulate economic growth

What did the gold standard require countries to do?

• Issue paper money and manage the money supply

• Establish central banks to provide stability and regulation

• Hold only a fraction of their customers deposits in reserve

• Maintain large reserves to back their currency

What did the advent of the internet bring about in banking?

• Rapid economic growth and increased demand for banking services

• Creation of regulatory bodies and insurance schemes

• Abandonment of the gold standard

• Proliferation of online banking