Banking

What is one primary role of banks?

• To store and safeguard deposits

• To print currency

• To issue debit cards

• To provide public welfare

What is the primary way banks make money?

• Charging high fees for account services

• Charging interest on loans

• Selling stocks and bonds

• Receiving government subsidies

What does FDIC insurance protect against?

• Identity theft

• Stock market crashes

• 
  Loan defaults

• Bank failures

What type of account is most likely to earn interest?

• Checking account

• Savings account

• Debit card account

• Credit card account

What type of bank focuses on providing banking services to large businesses and corporations?

• Retail bank

• Credit union

• Investment bank

• Commercial bank

What is the term for the difference between the interest banks earn on their loans and the interest banks pay to their depositors?

• Net Interest Margin

• Loan Spread

• Deposit Yield

• Credit Spread

What is a major benefit of credit unions compared to retail banks?

• Larger physical branch networks

• More complex financial products

• Government ownership

• Higher interest rates on deposits

What service is NOT typically provided by retail banks?

• Checking accounts

• Personal loans

• Investment banking

• Online banking

Which type of bank is responsible for implementing monetary policy?

• Retail bank

• Central bank

• Commercial bank

• Investment bank

If a bank offers a 2% interest rate on savings accounts and charges 5% interest on personal loans, what is the bank's net interest margin?

• 7%

• 3%

• 2%

• 5%