Banking today Quiz

How are most banks established?

• As partnerships

• As sole proprietorships

• As corporations

• As cooperatives

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

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

Who becomes part owners of a corporation by purchasing stock?

• A. Employees

• B. Managers

• C. Shareholders

• D. Creditors

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

Who is responsible for a corporation's debt?

• A. The shareholders

• B. The employees

• C. The corporation itself

• D. The government

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

What can new banks offer to attract deposits?

• Stocks

• Bonds

• Certificates of Deposit (CDs)

• Mutual Funds

What must be competitive for a bank to attract deposits?

• Loan rates

• Interest rates

• Service charges

• Transaction fees

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