Financial Institution 1(Commercial Banks)

What is the definition of a Financial Institution?

• Companies that offer legal services to individuals and businesses

• Entities that manufacture goods and sell them in the market

• Businesses that provide transportation services

• Organizations that provide financial services and facilitate the flow of funds in the economy

Which of the following is an example of a Financial Institution?

• Banks

• Restaurants

• Clothing stores

• Construction companies

What are the characteristics of Commercial Banks?

• Privately owned, operated for profit, serve a broad range of customers, joint stock companies

• Government-owned, operated for non-profit, serve a specific customer segment, partnership firms

• Community-owned, operated for social welfare, serve international customers, cooperative societies

• Publicly traded, operated for charity, serve only businesses, sole proprietorships

What is one of the functions of Commercial Banks?

• Accepting deposits

• Providing healthcare services

• Offering legal advice

• Selling agricultural products

What service do Commercial Banks provide related to currency?

• Car rental

• Home cleaning

• Currency exchange

• Mobile phone repair

What do Commercial Banks provide guidance on to their customers?

• Investment opportunities

• Cooking recipes

• Fashion trends

• Travel destinations

What is considered as a liability of Commercial Banks?

• Deposits from customers

• Real estate properties

• Luxury cars

• Art collections

What is the main aim of a commercial bank?

• To act as banker to the government

• To issue bank notes

• To make a profit

• To manage the national debt

What is a function of a commercial bank?

• to control the money supply

• to decide on the amount spent by the government

• to lend to individuals and firms

• to manage the national debt

Which of the following statements about different banks in an economy is correct?

• The central bank determines the tax and spending policies of the government

• The central banks loans to small businesses and members of the public

• Commercial banks holds the gold and foreign reserves of a country

• Commercial banks settle debts by clearing cheques of customers and debit card payments