Banking & Financial Services Unit 1 Review

Which of the following is not a financial institution?

• A power company.
• A credit card company.
• A stock brokerage.
• An insurance company.

Which of the following best describes online banking?

• Enables customers to conduct financial transactions on a secure website operated by their bank.
• Takes the place of the ATM.
• Allows customers to use their debit card to purchase things on the Internet.
• Access to online banking privileges is limited to those with commercial accounts.

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

• Insures each depositor in the case of bank failure.
• Regulates investment banks.
• Issues money to stabilize the economy.
• Guarantees mortgage loans.

Which of the following types of banks does not have a branch you can visit?

• An Internet bank.
• An interstate bank.
• A unit bank.
• A national bank.

What is the difference between a retail bank and a commercial bank?

• Retail banks serve consumers, and commercial banks serve businesses.
• Retail banks serve the needs of commercial banks.
• Retail banks serve businesses, and commercial banks serve consumers.
• Retail banks and commercial banks serve the same customers.

Which of the following is not a non-depository financial institution?

• A savings and loan association.
• An investment bank.
• A securities firm.
• An insurance company.

What is the difference between a savings account and a money market account?

• A money market account usually requires a greater initial deposit and pays higher interest.
• Savings accounts are only available to individuals.
• A savings account usually requires a greater initial deposit and pays higher interest.
• Money market accounts are only available to businesses.

Which of the following is not true of payday lenders?

• Interest rates on payday loans are lower than most other loans.
• They offer short-term loans designed to cover a customer's expenses until his or her next payday.
• They are a type of consumer-finance company.
• Many payday customers are unable to pay their payday loan when it is due.

Customers who make deposits are called _____.

• depositors
• bankers
• investors
• stockholders

Which of the following is not true of credit unions?

• They offer savings accounts called share draft accounts.
• They are owned by their members.
• They are cooperatives.
• They are not-for-profit organizations.