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WorksheetsFinancial Institutions Quiz No. 1 BSBA-FM 1C
Total questions: 50
Worksheet time: 25mins
What is the primary role of financial institutions?
To collect taxes from citizens
To act as intermediaries between fund sources and fund users
To regulate the stock market
To provide social services
What is the main function of a bank?
To sell insurance
To accept deposits and provide loans
To build roads and bridges
To manage the stock exchange
Thrift banks are also known as:
Commercial banks
Investment banks
Savings and loans associations (S&Ls) or thrifts
Credit unions
What is the role of rural banks?
To provide financial services exclusively to large corporations
To mobilize financial resources and extend credit to farmers and small businesses in rural areas
To manage the national budget
To regulate international trade
What is inflation?
A decrease in the general price level
A sustained increase in the average price of goods and services
A sudden drop in the stock market
An increase in unemployment
What does the Consumer Price Index (CPI) represent?
The average price of a single commodity
The average price of a standard basket of goods and services consumed by a typical Filipino family
The total value of all goods and services produced in the Philippines
The interest rate charged by banks on loans
What is the purpose of open market operations?
To regulate the price of oil
To expand or contract money supply by buying or selling government securities
To control the weather
To provide social services to the poor
What is the role of the Bangko Sentral ng Pilipinas in financial stability?
To regulate the price of oil
To control inflation and ensure a stable monetary system
To provide loans to businesses
To manage the national budget
What is the main function of the BSP in relation to banks?
To provide loans to banks
To collect taxes from banks
To serve as the supervisor and regulator of all banks in the Philippines
To manage the daily operations of banks
Which of the following best defines money?
Anything that is valuable and can be used to buy things
Any item or commodity that is generally accepted as a means of payment
Only coins and banknotes issued by the government
Gold and silver bullion
Which of the following is NOT a key characteristic of money?
Durability
Portability
Divisibility
Weight
Which of the following is NOT a primary function of money?
Store of value
Means of exchange
Unit of account
Source of entertainment
What economic system existed before the invention of money?
Capitalism
Socialism
Barter system
Command economy
What is a major disadvantage of the barter system?
It requires a double coincidence of wants
It is very easy to use
It leads to inflation
It promotes economic growth
Which of the following was the first form of money used in the Philippines?
Paper money
Coins minted by the Spanish
Commodity money like gold and silver
Credit cards
What was the currency introduced after Philippine independence in 1898?
The Philippine Peso
The Spanish Peso
The US Dollar
The Japanese Yen
What was the currency issued during the Japanese occupation in World War II?
The Philippine Peso
The Japanese War Notes (Mickey Mouse Money)
The US Dollar
The Euro
What is the role of money in the economy?
To make people rich
To facilitate trade, investment, and economic growth
To control the weather
To ensure everyone has the same amount of wealth
What happens when there is too much money in circulation?
Prices decrease
The economy experiences deflation
It leads to inflation, causing higher price levels
There are no significant effects
What are the three types of money demand?
Transaction demand, precautionary demand, and speculative demand
Supply demand, consumer demand, and producer demand
Domestic demand, foreign demand, and government demand
Labor demand, capital demand, and land demand
What is speculative demand for money?
Money held for daily transactions
Money held as a precaution against unexpected expenses
Money held due to expectations about future interest rates
Money donated to charity
What is a payment system?
A system for managing inventory
A mechanism that facilitates the transfer of monetary value
A method for collecting taxes
A system for predicting stock market trends
Which of the following is NOT a common payment method?
Cash
Credit card
Debit card
Teleportation
The primary function of a credit card is to:
Allow users to pay for purchases directly from their bank accounts
Allow users to borrow money up to a pre-approved limit
Store cash electronically
Invest money in the stock market
How do debit cards differ from credit cards?
Debit cards allow users to borrow money, while credit cards draw directly from the user's account
Credit cards allow users to borrow money, while debit cards draw directly from the user's account
Both operate in the same way
Debit cards are only used for online purchases
What is a digital wallet?
A physical wallet that stores digital currency
An electronic application that stores payment information
A device used for mining cryptocurrency
A type of online banking account
Technology enhances payment systems by:
Making them more complex and difficult to use
Enabling electronic transactions like mobile payments and online banking
Increasing the reliance on cash
Slowing down the speed of transactions
What is an electronic funds transfer (EFT)?
A physical transfer of cash
A digital transaction that moves money between bank accounts
A system for managing inventory
A type of insurance
What is a merchant bank?
A bank that only serves businesses
A bank that provides loans to individuals
A financial institution that provides capital to companies in the form of share ownership
A bank that operates only online
Traditional payment systems include:
Mobile payments and online banking
Physical instruments like cash, checks, and drafts
Cryptocurrencies like Bitcoin
Digital wallets
What does 'settling payments' mean?
Opening a new bank account
Applying for a loan
Completing a transaction by transferring funds between parties
Investing in the stock market
What does a payment gateway do?
Processes credit card information during a transaction
Issues credit cards to customers
Manages a bank's ATM network
Provides financial advice to businesses
What is mobile payment?
Paying for goods and services using a mobile device
Paying for goods and services with cash
Paying for goods and services by check
Paying for goods and services by credit card in a physical store
How do peer-to-peer (P2P) payments work?
Individuals send money directly to each other using mobile apps or online platforms
Individuals send money through a bank intermediary
Individuals exchange goods and services directly
Individuals invest in the stock market together
Which of the following is an advantage of electronic payments over traditional cash transactions?
Increased security features
Decreased speed of transactions
Increased reliance on physical cash
Decreased convenience for users
Why are payment systems important for the economy?
They make it difficult to buy goods and services
They increase the risk of fraud
They facilitate commerce by enabling efficient exchanges of money
They have no significant impact on the economy
What is a financial instrument?
A physical asset like real estate
A contract for monetary assets that can be traded
A type of currency
A government-issued bond
Which of the following are examples of cash instruments?
Stocks and bonds
Options and futures
Securities, deposits, and loans
Real estate and commodities
What defines a security?
A physical asset like gold or silver
A financial instrument that represents ownership in a company
A government-issued bond
A type of insurance policy
What are the two main types of cash instruments?
Stocks and bonds
Securities and deposits/loans
Derivatives and commodities
Cash and credit
What are derivative instruments?
Financial instruments whose values are fixed
Financial instruments whose values are derived from underlying assets
Physical assets like gold and silver
Government-issued bonds
Which of the following is NOT a common example of a derivative instrument?
Forward contracts
Futures
Options
Deposits
A forward contract is an agreement between two parties to:
Exchange an asset at a future date at a predetermined price
Lend money to each other
Share ownership in a company
Buy and sell real estate
How does a future differ from a forward?
Futures are standardized, while forwards are customizable
Forwards are standardized, while futures are customizable
There is no difference between futures and forwards
Futures are always more risky than forwards
An option gives the buyer the right to:
Borrow money from a bank
Purchase or sell an asset at a predetermined price
Give away their assets
Receive a fixed income
What is an interest rate swap?
An agreement to exchange currencies
An agreement to exchange interest payments on loans
An agreement to buy and sell a stock
An agreement to invest in real estate
Foreign exchange instruments primarily consist of:
Stocks and bonds
Commodities and real estate
Currency agreements and derivatives
Government-issued bonds
Which of the following is NOT an example of an equity-based financial instrument?
Common stock
Preferred stock
Convertible debentures
Bonds
Why are financial instruments important in business?
They allow businesses to raise capital and invest
They make it difficult for businesses to grow
They are only important for large corporations
They have no significant impact on the economy
Debt-based financial instruments are used by entities to:
Raise capital
Purchase real estate
Invest in the stock market
Donate to charity
