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WorksheetsBusiness Finance
Total questions: 24
Worksheet time: 12mins
Money is a legal tender; it is sanctioned by
the minister of office
the currency authority central bank
the cabinet
The most important function of money is
it is a medium of exchange
it is accepted by the company
it is made from paper and copper
it is issued by the central bank
An important use of money is to
store in the bank
pay debts
measure of value
pay for goods and service
Commercial banks aid international trade by
opening their banks all day
accepting deposits from traders
making investments from exporters
offering letters of credit to importers
The stock exchange is a marketplace where
all businesses raise financial capital
second-hand stocks are bought and sold
brokers buy and sell securities
shares are exchanged for stocks
Building societies offer loans specifically to
their members only
anyone wishing to build or buy a home
trade unions members
employees and their families
Collateral security is required by lending institutions because
borrowers are usually smart people
it helps poor people to get loans
it is a requirement of the law of the company
the asset can be sold in the event of non-payment
The system that enables inter-bank indebtedness is referred to as the
clearing-house system
cheque system
central banking system
commercial banking system
borrowing funds and issuing loans to citizens
open market operations
standing order
bill of exchange
central bank
Institutions that provide financing for traders
standing order
merchant banks
near money
central banks
Signed instructions given to a bank to make periodic payments on the depositor's behalf
bill of exchange
open market
commercial band
standing order
A document that demands payment at a future date
standing order
bill of exchange
cheque
debit card
Cheques and bank drafts
cash and coins
central banks
commercial banks
near money
Provides financial services to the government
Building societies
Central Banks
Commercial Banks
Credit unions
The impact of a central bank increasing the minimum reserve requirement in a particular country is to:
reduce the number of commercial banks licensed to operate in that country
reduce bank lending and hence consumer spending in that country
reduce competition between financial institutions in the banking sector
reduce the bank rate charged by the central bank to other banks
Which ONE of the following is a function of a commercial bank?
Regulates the central bank
Accepts deposits from the government
Makes payments systems available for customers
Issues notes and coins
Which ONE of the following is a function of a central bank?
Regulates commercial banks
Offers loans to individuals
Accepts deposits from firms
Issues debit cards
Which of the following is a disadvantage of a long-term loan?
It is only available for time periods up to one year
Only small sums of money can be borrowed from the bank
Interest has to be paid which adds to business costs
The bank can ask for the finance to be repaid at any time
Which of the following is a form of savings?
Bank loan
Term deposit account
Overdraft
Credit card
One roles of a stock market is to:
Buy shares from shareholders who want to sell
Allow buyers and seller of shares to trade in second-hand shares
Provide loans to all types of companies
Allow private limited companies to raise capital from the sale of shares to the public
One of the risk of buying shares is:
The share price might rise much higher than the shareholder expected
Other shareholders might want to buy shares in the same company
The company might collapse and the shares become worthless
Interest rates might fall and reduce the return on shares
A 'stag' in a stock market is a share trader who:
Buys more shares because they might fall in price
Buys more shares because they might increase in price
Sells shares as there is pessimism about share prices
Buy new issues of shares and sells them quickly
A key feature of an ordinary share is that:
One share equals one vote at the Annual General Meeting
Dividends are paid at a fixed rate of return each year
They do not carry voting rights, unlike preference shares which do
If the company fails and its assets are liquidated, holders of ordinary shares are paid back first
A bull market in a stock marker is one where:
More investors believe that share prices will fall than rise
More investors believe that share prices will rise than fall
Most investors are willing to sell their shares
Shareholders are only willing to buy new issues of shares
