Banking Quiz

What is the primary goal of banks as a business?

• To provide free services

• To earn a profit

• To support government policies

• To offer loans without interest

Where does most of a bank's profit come from?

• Service fees

• Selling financial products

• Interest charged on loans

• Government subsidies

From where do banks get the money they lend to customers?

• Government funds

• Their own reserves

• Deposits of other customers

• Stock market investments

What is the role of the Federal Deposit Insurance Corporation (FDIC) in banking?

• It regulates the interest rates banks can offer.

• It insures deposits up to $250,000.

• It provides loans to banks.

• It sets the inflation rate.

What requirement is placed on bank owners to ensure regulation?

• They must provide free services to customers.

• They must invest and keep money on reserve.

• They must offer loans to everyone.

• They must set their own interest rates.

What is the primary difference between commercial banks and credit unions in terms of profit distribution?

• Commercial banks distribute profits to members; credit unions distribute to shareholders.

• Commercial banks distribute profits to shareholders; credit unions reinvest in the business.

• Both distribute profits to shareholders.

• Both reinvest profits in the business.

Who are the primary customers of commercial banks?

• Members with a common characteristic

• Any consumer

• Only business owners

• Only government entities

Which organization insures deposits in commercial banks?

• National Credit Union Association (NCUA)

• Federal Credit Union Insurance Corporation (FCUIC)

• Federal Depositors Insurance Corporation (FDIC)

• National Bank Insurance Association (NBIA)

What is the role of the National Credit Union Association (NCUA)?

• To insure deposits in commercial banks

• To insure deposits in credit unions

• To regulate stock markets

• To provide loans to businesses

What is bartering?

• Trading goods and services without using money

• Using paper money for transactions

• Paying a specified sum to a person

• A monthly record of transactions