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WorksheetsFMT103_MIDTERM
Total questions: 85
Worksheet time: 21hrs 15mins
Composed of the myriad markets and institutions through which funds flow between lenders and borrowers
Financial System
Banking System
Financial Institution
Pawnshop
Refers to a marketplace, where creation and trading of financial assets, such as shares, debentures, bonds, derivatives, currencies, etc. take place.
Financial Market
Financial System
Bangko Sentral ng Pilipinas
None of these
The following are financial market participants except:
Governments
Banks
Market Makers
Non-Profit School
Money Market refers to all institutions and procedures that provide for transactions in short-term debt instruments that are generally issued by borrowers with good credit ratings
TRUE
FALSE
Capital market refers to all institutions and procedures that provide for transactions in long-term financial instruments
TRUE
FALSE
_______ is where securities are created. It's in this market that firms sell (float) new stocks and bonds to the public for the first time.
Secondary Market
Primary Market
Capital Market
Money Market
In Secondary Markets equity share is issued by the under writers and merchant bankers on behalf of the company.
TRUE
FALSE
In Primary Markets securities that are traded are traded by the retail investors.
TRUE
FALSE
What is the most appropriate definition of Financial Institutions
These Are Intermediaries that channel the savings of individuals, businesses and governments into loans and investment
involves lending by the ultimate lender to a financial intermediary who pools the funds of many lenders in order to relend at a mark-up over the cost of funds.
provides market players more access to vital information about borrowers’ and lenders’ expectations, and what they have to offer.
Helps mobilizing the funds for the investors for the short run.
Include all financial institutions engaged in the lending of funds obtained from the public primarily through the receipt of deposits of any kind.
Banking Institutions
Portfolio
Money Market
Capital Market
Key Services Provided by the Financial System are the following except:
Liquidity
Information
Risk Sharing
Discounts
In Risk Sharing, as one key factor in Financial System,
Allows saver to hold diversified assets
Financial institutions decrease the interest rate on loans
the bank takes full responsibility for any deficit
None of these
Diversification, as one of the Key Services Provided by the Financial System, is
The spreading of wealth into many assets to make up a portfolio to mitigate market risks
a collection of assets which may consist of investment holdings
Include all financial institutions engaged in the lending of funds obtained from the public primarily through the receipt of deposits of any kind.
None of these
Barriers to Matching Savers and Borrowers are, except:
Transaction Costs
Information Costs
Portfolio
Asymmetric information occurs when one party in a transaction has better information than the other, or when the borrower and the lender have different information about the transaction
TRUE
FALSE
Role of Financial Institutions are, except:
Term Transformation
Economies of scale and diversification in the use of funds
Technical Expertise
Liquidity
occurs when the lender is subject to the risk that the borrower will engage in risky activities that jeopardize repayment while seeking high returns.
Moral hazard
Screening
Transaction Cost
Information Cost
In Economies of scale and diversification in the use of funds,
Banks can use the combined savings of the small depositors to finance the large-scale investments of corporations.
Proceeds when banks finance long-term loans to companies through the short-term deposit liabilities.
Financial institutions maintain personnel who are knowledgeable in their business activities.
All of these
Direct Lending involves lending by the ultimate lender to a financial intermediary who pools the funds of many lenders in order to relend at a mark-up over the cost of funds.
TRUE
FALSE
Non-banking Institutions are Financial institutions other than banks whose principal functions include lending, investing or placement of funds or evidence of indebtedness or equity deposited with or otherwise acquired by them, either for their own account or for the account of others
TRUE
FALSE
Entities engaged in the lending of funds obtained in the form of deposits.
Bank
Financial Intermediaries
Investment Agencies
Insurance Companies
is a type of financial institution that accepts deposits, offers checking
account services, makes various loans, and offers basic financial products like certificates of deposits and savings accounts to individuals and small businesses.
Commercial Bank
Rural Bank
Thrift bank
Universal Bank
Government agency administer for the registration of bank.
Bureau of Internal Revenue
Department of Finance
Department of Trade and Industry
Securities and Exchange Commission
Prescribed rules and regulations on the type of stock a bank may issue, including the terms thereof and rights appurtenant thereto to determine compliance with laws and regulations.
Monetary Board
Philippine Deposit Committee
Bangko Sentral
Securities and Exchange Commission
Government agency administer for the registration of bank.
Bureau of Internal Revenue
Department of Finance
Department of Trade and Industry
Securities and Exchange Commission
Participates in many banking activities and is both commercial bank and an investment bank as well as providing other financial services.
Commercial Bank
Thrift bank
Rural Bank
Universal Bank
is a type of financial institution that accepts deposits, offers checking account services, makes various loans, and offers basic financial products like certificates of deposits and savings accounts to individuals and small businesses.
Commercial Bank
Thrift bank
Rural Bank
Universal Bank
Type of banks that is more popular in the rural communities
Commercial Bank
Rural Bank
Thrift bank
Universal Bank
Engaged in accumulating savings of depositors and investing them. They also provide short-term working capital and medium- and long-term financing to businesses engaged in agriculture, services, industry, and housing, and diversified financial and allied services, and to their chosen markets and constituencies, especially small- and medium- enterprises and individuals.
Commercial Bank
Rural Bank Philippines
Thrift bank
Universal Bank
To maintain the quality of bank management and afford better protection to depositors and the public in general, the _______________ shall prescribe, passed on upon, and review the qualifications and disqualifications of individuals elected or appointed bank directors or officers and disqualify those found unfit.
Board of Directors
Monetary Board
Chairman
Governor
After due notice the board of directors of the bank, the __________ may disqualify, suspend or remove any bank director or officer who commits or omits an act that renders him unfit for the position.
Board of Directors
Monetary Board
Chairman
Governor
Universal or commercial banks _____ open branches or other offices within or outside the Philippines upon prior approval of the Bangko Sentral.
May
May Not
Can Not
Has Right
Those do not have a full banking license but they facilitate bank-related financial services.
Commercial Bank
Thrift bank
Quasi-Banks
Universal Bank
Entities engaged in the lending of funds obtained in the form of deposits.
Bank
Financial Intermediaries
Investment Agencies
Insurance Companies
It supervises bank operations and activities.
Monetary Board
Bangko Sentral
Philippine Deposit Committee
Securities and Exchange Commission
Prescribed rules and regulations on the type of stock a bank may issue, including the terms thereof and rights appurtenant thereto to determine compliance with laws and regulations.
Monetary Board
Bangko Sentral
Philippine Deposit Committee
Securities and Exchange Commission
Government agency administer for the registration of bank.
Bureau of Internal Revenue
Department of Trade and Industry
Department of Finance
Securities and Exchange Commission
Participates in many banking activities and is both commercial bank and an investment bank as well as providing other financial services.
Commercial Bank
Thrift bank
Rural Bank
Universal Bank
Significance of Banks includes the following:
As financial services providers, they give you a safe place to store your cash. Through a variety of account types such as checking and savings accounts, and certificates of deposit (CDs), you can conduct routine banking transactions like deposits, withdrawals, check writing, and bill payments.
You can also save your money and earn interest on your investment. The money stored in most bank accounts is federally insured by the Philippine Deposit Insurance Corporation (PDIC)
Banks also provide credit opportunities for people and corporations.
are the newest type of banks that offer a broad range of financial services, such as deposits, loans, payment services, and money transfers, to the poor and low-income households for their micro-enterprises and small businesses.
Commercial banks
Universal Banks
Rural Banks
Microfinance Banks
The following are Non-Banks with Quasi-Banking Functions, except:
Cebu International Finance Corporation
Orix Metro Leasing and Finance Corporation
Philippine Depository and Trust Corporation
RCBC Capital Corporation
Philippine National Bank
Based on the listing provided by BSP on their website, this is the only bank classified as Offshore Banking Units in the Philippines:
Taiwan Cooperative Bank
Bank of China (Hongkong) Limited-Manila Branch
Cathay United Bank Co., LTD. - Manila Branch
Citibank, N.A.
Select all the Non-Banks without Quasi-Banking Functions:
AB Capital and Investment Corporation
DBP Leasing Corporation
PBC Capital investment Corporation
Philippine Guarantee Corporation
All are classified as Cooperative Banks (Coop. Banks), except:
Banco Cooperativa De Zamboanga
Bataan Cooperative Bank
Cooperative Bank of Nueva Vizcaya
Advance Credit Bank (A Rural Bank) Corp.
The following are Government UBs except for:
Al-Amanah Islamic Investment Bank of the Philippines
Development Bank of the Philippines
Land Bank of the Philippines
BPI
Which if the following is/are Private Domestic banks under Universal and Commercial Banks Section:
Robinsons Bank Corporation
Philippine Veterans Bank
Bank of Commerce
BDO Private Bank, Inc.
All of these
Select one or more Roles of the BSP in the payments and settlements system:
Operator of the real time gross settlement system known as PhilPaSS
Provider of credit facilities to banks as a lender of last resort
Overseer of the payments and settlements system
User of its own RTGS system
Initiate changes/reforms for the payments system
The new banking organization must have suitable shareholders, adequate financial strength, a legal structure in line with its operational structure, and management with sufficient expertise and integrity to operate the bank in a sound and prudent manner.
TRUE
FALSE
Payments Role of Banks Play in the Economy means:
Transforming savings received primarily from households into credit (loans) for business firms and others in order to make investments in the new building, equipment, and other goods
Carrying out payments for goods and services on behalf of customers (such as issuing and clearing checks, wiring funds, providing a conduit for electronic payments, and dispensing currency and coin
Standing behind their customers to pay off customer debts when those customers are unable to pay (such as issuing letters of credit)
Assisting customers in preparing financially for the risk of loss to property and persons
Guarantor Role of Banks Play in the Economy means:
Transforming savings received primarily from households into credit (loans) for business firms and others in order to make investments in the new building, equipment, and other goods
Carrying out payments for goods and services on behalf of customers (such as issuing and clearing checks, wiring funds, providing a conduit for electronic payments, and dispensing currency and coin
Standing behind their customers to pay off customer debts when those customers are unable to pay (such as issuing letters of credit)
Assisting customers in preparing financially for the risk of loss to property and persons
Risk Management Role of Banks Play in the Economy means:
Transforming savings received primarily from households into credit (loans) for business firms and others in order to make investments in the new building, equipment, and other goods
Carrying out payments for goods and services on behalf of customers (such as issuing and clearing checks, wiring funds, providing a conduit for electronic payments, and dispensing currency and coin
Standing behind their customers to pay off customer debts when those customers are unable to pay (such as issuing letters of credit)
Assisting customers in preparing financially for the risk of loss to property and persons
Savings/Investment Advisor Role of Banks Play in the Economy means:
Aiding customers in fulfilling their long-range goals for a better life by building, managing and protecting savings
Acting on behalf of customers to manage and protect their property or issue and redeem their securities (usually provided through a trust department)
Safeguarding a customer’s valuables and appraising and certifying their true market value
Serving as a conduit for government policy in attempting to regulate the growth of the economy and pursue social goals.
Agency Role of Banks Play in the Economy means:
Aiding customers in fulfilling their long-range goals for a better life by building, managing and protecting savings
Acting on behalf of customers to manage and protect their property or issue and redeem their securities (usually provided through a trust department)
Safeguarding a customer’s valuables and appraising and certifying their true market value
Serving as a conduit for government policy in attempting to regulate the growth of the economy and pursue social goals.
Safekeeping/Certification of Value Role of Banks Play in the Economy means:
Aiding customers in fulfilling their long-range goals for a better life by building, managing and protecting savings
Acting on behalf of customers to manage and protect their property or issue and redeem their securities (usually provided through a trust department)
Safeguarding a customer’s valuables and appraising and certifying their true market value
Serving as a conduit for government policy in attempting to regulate the growth of the economy and pursue social goals.
Policy Role of Banks Play in the Economy means:
Aiding customers in fulfilling their long-range goals for a better life by building, managing and protecting savings
Acting on behalf of customers to manage and protect their property or issue and redeem their securities (usually provided through a trust department)
Safeguarding a customer’s valuables and appraising and certifying their true market value
Serving as a conduit for government policy in attempting to regulate the growth of the economy and pursue social goals.
Bank's Principle of Liquidity means
To meet the demand for cash, all banks have to keep certain amount of cash in their custody.
The driving force of commercial enterprises is to generate profit.
Banks should be financially sound and maintain a required capital for running the business.
While investing the fund, banks are to be cautious because bank’s money is depositor’s money.
Bank's Principle of Profitability means
To meet the demand for cash, all banks have to keep certain amount of cash in their custody.
The driving force of commercial enterprises is to generate profit.
Banks should be financially sound and maintain a required capital for running the business.
While investing the fund, banks are to be cautious because bank’s money is depositor’s money.
Bank's Principle of Solvency means
To meet the demand for cash, all banks have to keep certain amount of cash in their custody.
The driving force of commercial enterprises is to generate profit.
Banks should be financially sound and maintain a required capital for running the business.
While investing the fund, banks are to be cautious because bank’s money is depositor’s money.
Bank's Principle of Safety means
To meet the demand for cash, all banks have to keep certain amount of cash in their custody.
The driving force of commercial enterprises is to generate profit.
Banks should be financially sound and maintain a required capital for running the business.
While investing the fund, banks are to be cautious because bank’s money is depositor’s money.
Bank's Principle of Economy means:
The main earning sources of banks are lending and investing money to viable projects.
Banks always try to earn profit through sound investment.
Banks never go for any unnecessary expenditure.
They always try to maintain their functions with the economy that increase their yearly profit.
Bank's Principle of Providing Services means:
The commercial bank thinks that customer service should be done efficiently and promptly.
A better service brings a great reputation for the bank
Bank maintains and keeps the clients’ accounts secretly.
Nobody except the authorized person is allowed to see the accounts of the clients.
Bank's Principle of Secrecy means:
The commercial bank thinks that customer service should be done efficiently and promptly.
A better service brings a great reputation for the bank
Bank maintains and keeps the clients’ accounts secretly.
Nobody except the authorized person is allowed to see the accounts of the clients.
Bank's Principle of Modernization means:
to cope up with the advanced world the bank has to adopt advanced technical services like online banking, credit card etc.
Banks segments their whole functions into various parts and place their human resources according to their efficiency.
Banks choose a suitable site where the availability of customers is large.
Banks always try to maintain a good relationship with their clients and potential customers.
Bank's Principle of Specialization means:
to cope up with the advanced world the bank has to adopt advanced technical services like online banking, credit card etc.
Banks segments their whole functions into various parts and place their human resources according to their efficiency.
Banks choose a suitable site where the availability of customers is large.
Banks always try to maintain a good relationship with their clients and potential customers.
Bank's Principle of Location means:
to cope up with the advanced world the bank has to adopt advanced technical services like online banking, credit card etc.
Banks segments their whole functions into various parts and place their human resources according to their efficiency.
Banks choose a suitable site where the availability of customers is large.
Banks always try to maintain a good relationship with their clients and potential customers.
Bank's Principle of Relation means:
to cope up with the advanced world the bank has to adopt advanced technical services like online banking, credit card etc.
Banks segments their whole functions into various parts and place their human resources according to their efficiency.
Banks choose a suitable site where the availability of customers is large.
Banks always try to maintain a good relationship with their clients and potential customers.
Process in Organizing a bank includes the following except:
Application Process
Opening of the Bank for Business after the Certificate of Authority to Operate has been Issued
Start of Operations
Retirement of the bank
Pre-Approval process in organizing a bank includes the following except:
The application for authority to establish a bank shall be submitted to the Office of Supervisory Policy Development (OSPD) in two (2) copies.
Submit the required papers/documents and other information in support of the application
The application shall be processed on a first-come, first-served basis: Provided, that all the required documents are complete and properly accomplished.
Banks to be established shall comply with the required minimum capital prescribed under Subsec. X111.1
The required papers/documents and other information in support of the application are, as follows, except:
Corporate strategy and economic justification for establishing the bank.
Notarized Certification executed by each of the subscribers that the amount committed to pay the proposed paid-up capitalization in the bank was not derived from borrowings, unlawful activity, or any money laundering activity.
Sales Report
a. Feasibility study to show viable business together with projected monthly financial statements for the first twelve (12) months of operations, using realistic assumptions consistent with the proposed business model and corporate strategy.
The required papers/documents and other information for corporate subscribers in support to the application for organizing a bank is/are:
Board resolution authorizing the corporation to invest in such bank; and designating the person who will represent the corporation in connection there with
Latest articles of incorporation and by-laws
Annual report with audited financial statements for the last two (2) years prior to the filing of application
A, B, & C
A & B Only
On the Minimum Capital Requirements for Banks Table, 1/ means inclusive of head office.
TRUE
FALSE
In the process of organizing a bank, within thirty (30) days from receipt of advice of approval by the Monetary Board of their application for authority to establish the bank, the organizers shall perform the following:
Submit the proposed articles of incorporation, by-laws and treasurer’s sworn statement in four (4) copies;
Pay the applicable license fee at the Bangko Sentral Cash Department, net of the previously paid application fee
Show Proof of inward remittance of capital, in the case of foreign subscribers.
All of These
You can Open the Bank for Business even before the issuance of Certificate of Authority to Operate.
TRUE
FALSE
Within five (5) banking days after the start of the operation, the bank shall Inform the Bangko Sentral of the first day of operation and the banking days and hours;
TRUE
FALSE
The authority to establish a bank shall be automatically revoked if the bank is not organized and opened for business within 6 months after receipt by the organizers of the notice of approval by the Monetary Board of their application.
TRUE
FALSE
QUALIFICATIONS, DUTIES, RESPONSIBILITIES AND LIABILITIES OF THE BOARD OF DIRECTORS - Pursuant to Sections 15 and 17 of R.A. No. 8791, there shall be at least five (5), and a maximum of fifteen (15) members of the board of directors of a bank/quasi-bank/trust entity two (2) of whom shall be independent directors: Provided, That in case of a bank/quasi-bank/trust entity merger or consolidation, the number of directors may be increased up to twenty-one (21).
TRUE
FALSE
In organizing a bank, to be qualified as independent director:
Is not or has not been an officer or employee of the bank/quasi-bank/trust entity, its subsidiaries or affiliates or related interests during the past three (3) years counted from the date of his election;
Is not a director or officer of the related companies of the institution’s majority stockholder;
Is not a majority shareholder of the institution, any of its related companies, or of its majority shareholder;
All of these
None of these
To be qualified as a director in a bank, he must be fit and proper for the position of a director of the bank/quasi-bank/trust entity. In determining whether a person is fit and proper for the position of a director, the following matters must be considered:
Integrity, competence, education, diligence, & experience
Integrity, competence, education, diligence, & SALN
Integrity, competence, education, diligence, & Relative of the governor
None of these
Persons Disqualified to Become Officers in a bank is/are:
In the case of Universal Banks, Commercial Banks, and Thrift Banks, any appointive or elective officials whether full time or part time, except in cases where such service is incident to financial assistance provided by the government or government-owned or controlled corporations or in cases allowed under existing law.
In the case of Cooperative Banks, any officer or employee of the Cooperative Development Authority or any elective public official, except a barangay official.
A & B
None of These
If after evaluation, the Monetary Board shall find grounds for disqualification, the director/officer so elected/ appointed may be removed from office even if he/she has assumed the position to which he/she was elected.
TRUE
FALSE
The purpose of Watch List is to provide the BSP with a central information file to be used as a reference in passing upon and reviewing the qualifications of persons elected or appointed as director or officer of a bank, quasi bank or trust entity, the Supervision and Examination Sector
TRUE
FALSE
Watchlist categories of disqualified bank/quasi bank /trust entity directors/officers is/are:
Disqualification File “A” Permanent
Disqualification File “B” Temporary
Disqualification File “C” Partly Permanent
Disqualification File “D” Partly Temporary
Following are the basic concepts that should be considered by Management when developing policies and procedures, Except:
Compliance
Operational Needs
Revenue
Risk Management
Improvement
Bank's Agency Functions is/are:
Collection of Cheques, Dividends, Interests, etc.
Payment of Subscription, Rent, Insurance Premium.
Conduct of Stock Exchange Transactions
Preparation of Income Tax Returns
What are the importance of Loan?
Purchasing Asse
Investment
Debt Management
Construction and Improvement
