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WorksheetsQuiz 1 for Seminar
Total questions: 15
Worksheet time: 8mins
The main function of banks is
To collect funds (deposits) from surplus untis and lend funds (loans) to deficit units
buy primary securities and sell secondary securities
buy from brokers and dealers and sell to the public
none of the above
borrow in small denominations and lend in large
Which mechanism has developed demand deposits to control banks' risk aversion because changes in demand and demand for these instruments will be reflected in financing costs and these disciplines, or have forced banks to exercise caution?
consumption smoothing
A commitment mechanism
information production
Liquidity mechanism
Risk transformation
Transaction costs associated with the lending process are likely to be reduced significantly, especially where straightforward deposit facilities are utilized. This idea can be attributed to:
The benefits of ultimate lenders
The benefits of society as a whole
The benefits for investors
The benefits of ultimate borrowers
All of above
Which of the bank types' main aim is to help government raise funds in the financial market?
E-commerce
Private banking
Commercial bank
Investment banking
Internet banking
__________are instructions from the customer (account holder) to the bank to pay a fixed amount at regular intervals into the account of another individual or company.
Standing orders
Credit cards
Credit transfers
Plastic cards
Direct debits
Central banks can serve as a lender of last resort because:
banks are more likely to borrow money from their depositors during a financial panic
they are the only financial institution that is legally allowed to make loans during a financial panic
they have the ability to create money to stimulate banks
because only the central bank has the opportunity to lend at lower interest rates and in larger amounts
the interest rates they charge are so high that banks are virtually never willing to borrow from the central bank
The majority of __________ revenue came from lending activities, which included accepting deposits and issuing loans.
Traditional banking
Modern banking
Classic banking
International banking
Universial banking
A borrower's interest rate can be determined using which of the following?
credit amount
credit availability from the bank
repayment schedules
Credit score
Loan terms
The type of bank account in which the deposited amount cannot be withdrawn before the maturity of the term is.
Transaction account
Time/fixed deposit account
Current bank account
Nostro account
MMDA deposit account
If a bank has deposits of $100,000, loans of $75,000, cash on hand of $10,000, and $12,000 on deposit at the Central Bank, then its reserve ratio is:
5%
1%
10%
12%.
15%
The main functions of a central bank can be each of the following EXCEPT:
The central bank controls the issue of notes and coins (legal tender)
A central bank could also deal with the general public to provide funds.
It has the power to control the amount of credit-money created by banks
The central bank also acts as the official agent to the government in dealing with all its gold and foreign exchange matters
A central bank acts as the government’s banker
Decrease in reserve requirements can lead to
decrease in money supply
decrease in excess reserve
more required reserve in banks
less money to lend
increase in money supply
Which of the following is a depository source of funds for banks?
revolving credit loan
MMDAs
federal funds
bank capital
repurchase agreements
A ____ is a time deposit offered by some large banks to corporations, with a specific maturity date, minimum deposit of $100,000 or more, and a secondary market.
negotiable CD
market CD
retail CD
tradable CD
protective CD
Which of the following is a transaction deposit?
negotiable certificates of deposit
NOW account
certificates of deposit
passbook savings
none of above
