FT Money and Banking_Eng

What is the primary function of pawnbroking in society?

• To provide long-term investments for clients
• To provide health insurance to the community
• To provide short-term loans using personal items as collateral
• To offer free financial advice to customers
• To sell luxury items at discounted prices

What is the fundamental principle that governs pawnbroking operations?

• Accepting only cash as collateral
• Operating without a license
• Providing loans without any collateral
• Lending money in exchange for items of value as collateral
• Charging exorbitant interest rates

What is the main difference between Sharia-compliant and conventional pawnbroking?

• Sharia-compliant pawnbroking requires collateral
• Conventional pawnbroking is only available in certain countries
• Sharia-compliant pawnbroking has higher interest rates
• Conventional pawnbroking is not regulated by religious laws
• Sharia-compliant pawnbroking does not charge interest.

One of the major risks in pawnbroking is:

• Potential for stolen items to be pawned
• Strict regulations on pawn shops
• Easy access to cash
• High interest rates for borrowers
• Low risk of financial loss

Risk management in pawnbroking involves:

• Accepting all items without verification
• Implementing security measures, conducting background checks, setting appropriate rates, and having insurance coverage.
• Charging exorbitant interest rates
• Not having any security measures in place
• Ignoring customer complaints

Technology that enhances transparency in digital pawnbroking includes:

• Virtual reality technology
• Biometric authentication
• Blockchain technology, smart contracts, real-time access to account information
• Augmented intelligence
• Cryptocurrency mining

Improved accessibility provided by digital pawnbroking aims to:

• Extend the loan approval process
• Increase interest rates for borrowers
• Require physical presence for all transactions
• Limit the types of items that can be used as collateral
• Make the process of obtaining loans secured by personal items more convenient and efficient.

The role of pawnbroking in the modern economy includes:

• Pawnbroking is illegal in most countries
• Pawnbroking does not involve collateral
• Pawnbroking is a form of long-term investment
• Pawnbroking has no impact on the resale market
• Pawnbroking provides short-term credit, allows individuals to borrow money using personal items as collateral, and contributes to the resale market.

In the context of pawnbroking, fintech plays a role in:

• Limiting payment options
• Offering physical pawnshop locations only
• Using outdated manual processes
• Providing online platforms, facilitating faster transactions, automated valuation processes, and improving customer experience.
• Ignoring customer feedback

What basic principle distinguishes cooperatives from other business forms?

• Democratic control
• Monopoly control
• Anarchic control
• Hierarchical control
• Oligarchic control