wayground logo

Free Printable Worksheets

Font size

S
M
L
XL
Worksheets

Banking Final Exam Review

Total questions: 200

Worksheet time: 2hrs 42mins

Name
Class
Date
1.

Real estate is a low risk investment.

a)

True

b)

False

2.

Changes in currency can be made to recognize individuals or events of historical significance.

a)

True

b)

False

3.

Interest received on corporate bonds is not taxable.

a)

True

b)

False

4.

Collectibles are considered one of the safest and most liquid investments available.

a)

True

b)

False

5.

A bank is a not-for-profit corporation.

a)

True

b)

False

6.

Generally speaking, banks offer customers fewer services today than they did 20 years ago.

a)

True

b)

False

7.

Commercial banks today offer their services only to businesses.

a)

True

b)

False

8.

Stockholders can lose all of their investment if the company fails or goes out of business.

a)

True

b)

False

9.

The most important type of automobile insurance coverage is liability.

a)

True

b)

False

10.

Raising the deductible can reduce the overall price of an insurance policy.

a)

True

b)

False

11.

The best reason to save money is to provide for future needs.

a)

True

b)

False

12.

A medium of exchange is anything people use to trade for things of value.

a)

True

b)

False

13.

The most common form of negotiable instrument is a promissory note.

a)

True

b)

False

14.

A checking account is a time deposit.

a)

True

b)

False

15.

Most large money transactions involve entries in a computer (digital transactions) rather than the movement of physical currency.

a)

True

b)

False

16.

Everybody needs life insurance.

a)

True

b)

False

17.

Generally speaking, when interest rates are high, more credit is accessible and the economy tends to grow quickly.

a)

True

b)

False

18.

One of the main functions of the Federal Reserve is to serve as a bank for other banks.

a)

True

b)

False

19.

Money is a medium of exchange.

a)

True

b)

False

20.

Corporate bonds are sold on the open market through brokers, just like stock.

a)

True

b)

False

21.

A check cannot be negotiated until endorsed.

a)

True

b)

False

22.

In the United States, the government plays the greatest role in determining how money is moving through the economy.

a)

True

b)

False

23.

A transaction account allows transactions to occur at any time and in any number.

a)

True

b)

False

24.

During the mortgage crisis, the government did not intervene to rescue financial institutions on the brink of failure.

a)

True

b)

False

25.

A loosening of lending oversight standards contributed to the recent mortgage crisis.

a)

True

b)

False

26.

Real property refers to anything nor permanently attached, such as cars, furniture, and clothing.

a)

True

b)

False

27.

A certificate of deposit is more liquid than a savings account.

a)

True

b)

False

28.

The greater risk you are willing to take when investing, the greater the potential returns.

a)

True

b)

False

29.

A discount broker usually provides little or no investment advice to the client.

a)

True

b)

False

30.

A stock split lowers the selling price of stock, making the shares more affordable and encouraging investors to buy more.

a)

True

b)

False

31.

It is illegal for banks to charge higher interest rates for loans than they pay on deposits.

a)

True

b)

False

32.

A dollar bill represents an obligation of the government to provide a commodity of value to you.

a)

True

b)

False

33.

All banks today are owned by the government.

a)

True

b)

False

34.

Typically, odds are good that you will make a profit in speculative investments.

a)

True

b)

False

35.

Student loans do not need to be repaid if you drop out of college before earning your degree.

a)

True

b)

False

36.

The more often interest is compounded, the greater your interest earning will be.

a)

True

b)

False

37.

Your initial investing should be conservative and low risk.

a)

True

b)

False

38.

Which of the following methods is NOT a good way to find an insurance policy?

a)

comparison shopping

b)

asking family, friends, and neighbors for recommendations

c)

check consumer sites for complaints against insurers

d)

automatically buying the cheapest policy

39.

Which of the following is a non-depository intermediary?

a)

commercial bank

b)

insurance company

c)

savings and loan association

d)

credit union

40.

The difference between what a bank pays in interest and what it receives in interest is called

a)

profit.

b)

spread.

c)

gross interest income.

d)

loss.

41.

Check 21 allows

a)

banks to limit checking accounts to 21 transactions per month.

b)

a discount on account service fees if more than 21 checks are written each month.

c)

funds to remain in an account until 21 days after the check is written.

d)

substitute checks to process electronically.

42.

Which of the following is NOT part of the organizational structure of the Federal Reserve?

a)

primary credit facilities

b)

district reserve banks

c)

member banks

d)

board of governors

43.

Which of the following is MOST liquid?

a)

the money in your savings account

b)

100 shares of stock

c)

the money in your wallet

d)

a certificate of deposit that matures in 6 months

44.

A check that is dated six months or more before it is presented for payment of deposit is called a(n):

a)

stale check.

b)

postdated check.

c)

bounced check.

d)

overdraft check.

45.

Which of the following would be considered the highest risk investment?

a)

an annuity

b)

collectibles

c)

real estate

d)

Treasury securities

46.

Which of the following would be considered the lowest risk investment?

a)

stock

b)

real estate

c)

an annuity

d)

a corporate bond

47.

Interest paid on the original principal plus accumulated interest is called

a)

yield.

b)

value-added interest.

c)

adjustable interest.

d)

compound interest.

48.

The price for which stock is bought and sold in the marketplace is called the

a)

par value.

b)

yield.

c)

market value.

d)

dividend.

49.

Which of the following is NOT a time deposit?

a)

savings account

b)

checking account

c)

money market account

d)

certificate of deposit

50.

Which of the following would be considered a long-term need?

a)

buying a washing machine

b)

a weekend getaway vacation

c)

home ownership

d)

car repair

51.

All of the following are wise investment practices EXCEPT

a)

seek good investment advice.

b)

keep good financial records.

c)

define financial goals.

d)

make decisions quickly to take advantage of the market.

52.

One result of competition among banks is that

a)

more banking services are available to consumers.

b)

new technology has been used to make banking more convenient.

c)

banks have created new types of accounts and loan products to meet the needs of consumers.

d)

All of the options are a result of competition among banks.

53.

The use of long-term savings to earn a financial reward is called

a)

investing.

b)

gambling.

c)

diversifying.

d)

speculating.

54.

Which of the following would be considered a medium risk investment?

a)

a corporate bond

b)

penny stock

c)

collectibles

d)

mutual funds

55.

Which of the following is NOT a source of income for a bank?

a)

the interest earned by depositors

b)

investments

c)

interest on loans

d)

fees for services

56.

Which of the following would be considered the lowest risk investment?

a)

U.S. savings bond

b)

corporate bond

c)

mutual funds

d)

stock

57.

Which of the following endorsements is the least secure?

a)

qualified endorsement

b)

full endorsement

c)

restrictive endorsement

d)

blank endorsement

58.

A situation in which some kind of loss is possible is referred to as

a)

insurability.

b)

risk.

c)

transference.

d)

intangibility.

59.

What was the most common medium of exchange in colonial America?

a)

paper money

b)

coins

c)

checks

d)

pieces of gold and silver

60.

Which of the following is an example of a restrictive endorsement?

a)

"For deposit only"

b)

just the signature of the holder

c)

"Pay to the order of Drew Theriault"

d)

"Pay to the order of Heather Culp, without recourse"

61.

The most common form of transaction account is a

a)

savings account.

b)

checking account.

c)

money market account.

d)

certificate of deposit.

62.

What causes stagflation?

a)

a stagnant economy

b)

high inflation

c)

high unemployment

d)

All of the answers cause stagflation.

63.

The widest variety of banking services are provided at a

a)

credit union.

b)

savings and loan association.

c)

commercial bank.

d)

savings bank.

64.

Savings accounts protected by the FDIC are protected from loss for up to

a)

$100,000.

b)

$250,000.

c)

$500,000.

d)

$1,000,000.

65.

An increase in the value of stock over time is called a(n)

a)

investment.

b)

capital gain.

c)

dividend.

d)

yield.

66.

Insurance handles risk by

a)

reducing it.

b)

avoiding it.

c)

transferring it.

d)

ignoring it.

67.

The payments an insured makes to an insurer are called

a)

product options.

b)

benefits.

c)

premiums.

d)

deductibles.

68.

In the United States, banks and the government work together to form the banking system and to ensure that the money supply is adequate, appropriate, and trustworthy.

a)

True

b)

False

69.

The official currency of the United States can be classified as

a)

conventional money.

b)

fiat money.

c)

commodity money.

d)

product money.

70.

The rate of interest the Federal Reserve charges banks for short-term loans is called the

a)

discount rate.

b)

market rate.

c)

reserve requirement rate.

d)

prime rate.

71.

Using dividends previously earned on stock to buy more share of stock is called

a)

dividend reinvestment.

b)

direct investment.

c)

short selling.

d)

preferred reinvesting.

72.

Banks move money between other banks, individuals, businesses, and governments.

a)

True

b)

False

73.

Which of the following directly transfers money from a person's bank account to the account of a retailer?

a)

charge card.

b)

credit card.

c)

debit card.

d)

cash card.

74.

This type of checking account has two or more owners, each of whom has equal and independent access.

a)

share

b)

individual

c)

group

d)

joint

75.

All media of exchange circulating is a county is called

a)

dollar bills.

b)

commodity money.

c)

consideration.

d)

currency.

76.

The agency that insures bank deposits is the FICO.

a)

True

b)

False

77.

A collective rise in prices is called

a)

a recession.

b)

stagflation.

c)

inflation.

d)

the multiplier effect.

78.

A type of stock that pays a fixed dividend, but has no voting rights, is called

a)

preferred stock.

b)

common stock.

c)

dividend stock.

d)

junk stock.

79.

Money that is deemed legal tender by the government is called

a)

comprehensive money.

b)

municipal money.

c)

fiat money.

d)

federal money.

80.

Payday loan companies charge lower interest rates for loans than commercial banks.

a)

True

b)

False

81.

Non-profit organizations established by groups of people who pool their money are called

a)

commercial banks.

b)

credit unions.

c)

central banks.

d)

finance companies.

82.

Banks are the middleman for many financial transactions. For this reason, they are called.

a)

financial intermediaries.

b)

depositary companies.

c)

financial corporations.

d)

municipal intermediaries.

83.

The type of automobile insurance that protects an individual against automobile theft, vandalism, and damage from fire is called.

a)

liability.

b)

uninsured motorist.

c)

collision.

d)

comprehensive.

84.

Which of the following accounts is considered the most liquid?

a)

Checking account

b)

Certificate of deposit

c)

Real estate investment

d)

Corporate bond

85.

Which statement about the Federal Reserve is correct?

a)

It sets interest rates for all banks directly.

b)

It acts as a lender of last resort for member banks.

c)

It only serves individual consumers.

d)

It is a for-profit corporation.

86.

Which type of investment generally carries the highest risk?

a)

Certificate of deposit

b)

Savings account

c)

Speculative stocks

d)

Government bonds

87.
The primary role of the Federal Reserve Bank is to steer the economy by
a)
controlling the budget
b)
setting spending levels.
c)
controlling the money supply.
d)
loaning out money.
88.

What does a Stock Market Index provide to investors?

a)

A detailed financial report of a company

b)

A method to buy stocks directly

c)

A snapshot of how the markets are performing

d)

A historical account of stock prices

89.

What is a Certificate of Deposit best described as?

a)

A) A high-risk, high-reward investment

b)

B) A document proving ownership of a bond

c)

C) A low-risk, low-reward investment where money is loaned to a financial institution

d)

D) A type of stock in a company

90.

State banks had different currencies and policies in the early years of the United States.

a)

True

b)

False

91.

How did Alexander Hamilton feel about a national, central US bank?

a)

He supported it because he thought it would help create a strong government

b)

He supported it because he thought it would make him a lot of money.

c)

He opposed it because it would give too much power to too few people.

d)

He opposed it because he believed states should each have their own banks.

92.

How did Thomas Jefferson feel about a national, central US bank?

a)

He supported it because he thought it would help create a strong government

b)

He supported it because he thought it would make him a lot of money.

c)

He opposed it because it would give too much power to too few people.

d)

He opposed it because he believed states should each have their own banks.

93.

What does it mean when the government bails out a bank?

a)

The government buys the bank and becomes the owner

b)

The government forces the bank to close

c)

The government loans money to the bank

d)

The government stops taxing the bank

94.

What might happen if the government did not insure bank deposits?

a)

Banks would be robbed far more often.

b)

People would lose their savings if their banks went out of business.

c)

Banks would have to buy safe with extremely thick metal walls.

d)

Banks could no longer make loans to their customers.

95.

Which of the following is a true statement about banking?

a)

Keeping your money at home instead of a banks prevents you from paying the interest fees that banks charge.

b)

It's generally safer to keep your money in a bank than to keep it at home.

c)

Most new businesses are forced to start without loans from banks.

d)

Most banks give their customers interest-free loans.

96.

Joey's father is in a car accident and cannot work. What type of insurance replaces his father's earnings?

a)

Health

b)

Life

c)

Disability

d)

Property and Liability

97.

David's mother is killed in an automobile accident. What type of insurance would provide his family financial support to cover the paid and unpaid work his mother performed?

a)

Life

b)

Health

c)

Disability

d)

Worker's Compensation

98.

A beneficiary is the individual who takes out the life insurance policy

a)

True

b)

False

99.

What is the primary purpose of the Federal Reserve?

a)

To issue corporate bonds

b)

To provide loans to individuals

c)

To regulate the money supply

d)

To insure bank deposits

100.

Which type of account typically offers the highest interest rate?

a)

Checking account

b)

Savings account

c)

Certificate of deposit

d)

Money market account

101.
The most common maturity date for a corporate bond is one year. Mark only one oval.
a)
True
b)
False
102.
Every corporation's stock is traded on the New York Stock Exchange.
a)
True
b)
False
103.
Preferred shareholders are always paid dividends before common shareholders.
a)
True
b)
False
104.
When you invest in stock, you are essentially giving a loan to the corporation.
a)
True
b)
False
105.
You can always sell stock for at least its par value.
a)
True
b)
False
106.
If a bond is being sold for "102," this means that the bond is selling for a 2% discount.
a)
True
b)
False
107.
Only registered brokers can make trades in a securities exchange like the New York Stock Exchange.
a)
True
b)
False
108.
Delta Airlines is an example of a defensive stock.
a)
True
b)
False
109.
Coca-Cola is an example of a blue chip stock.
a)
True
b)
False
110.
Common stock pays a fixed dividend, but has no voting rights.
a)
True
b)
False
111.
A prolonged period of rising stock prices is called a
a)
bear market.
b)
bull market.
112.
All types of stock pay annual dividends.
a)
True
b)
False
113.
A bond rating tells an investor how much interest the bond will pay.
a)
True
b)
False
114.

Investing in real estate is risk-free because the value of real estate always increases over time.

a)

True

b)

False

115.

True or False. Individuals purchase bonds as a way to "lend" money (or invest) with businesses and government entities. In return they earn interest on the money they lend for a specific period of time.

a)

True

b)

False

116.

You can always profit from stocks by holding the shares of stock for at least 5 years.

a)

True

b)

False

117.

True or False: Investing in a diversified portfolio of stocks guarantees you will not lose money.

a)

True

b)

False

118.

A single share of ownership of a legally formed company is called a:

a)

Bond

b)

Mutual Fund

c)

Annuity

d)

Stock

119.

When researching investment options, which of the following is a good source of information?

a)

financial magazines

b)

financial advisors

c)

investor newsletters

d)

All options are good sources of information.

120.

Which of the following is a benefit of investing early?

a)

Higher taxes

b)

More time for your money to grow through compound interest

c)

Immediate access to funds

d)

Guaranteed returns

121.

What does it mean for an investment to be "volatile"?

a)

It is guaranteed to increase in value

b)

Its value changes frequently and unpredictably

c)

It is a safe investment

d)

It offers fixed interest rates

122.

Which of the following is NOT a characteristic of a high-risk investment?

a)

High potential returns

b)

Guaranteed returns

c)

Possibility of losing the initial investment

d)

Volatility in value

123.

Which of the following is NOT a characteristic of a stock?

a)

Pays interest regularly

b)

Represents ownership in a company

c)

Can be traded on an exchange

d)

May pay dividends

124.

Which of the following is an example of a low-risk investment?

a)

real estate

b)

penny stock

c)

Treasury Bill

d)

collectibles

125.

The money that you earn on an investment is called

a)

diversification

b)

return

c)

portfolio

d)

windfall

126.

The more often interest is compounded, the greater your interest earnings will be.

a)

True

b)

False

127.

Discretionary income means how much money you earn each month.

a)

True

b)

False

128.

Safer, more liquid investments have more earning potential than riskier, less liquid investments.

a)

True

b)

False

129.
Short-term needs include things such as home ownership, education of children, and retirement
a)
True
b)
False
130.
Early withdrawal penalties are charged against certificates of deposit for withdrawals prior to maturity.
a)
True
b)
False
131.
Interest rates on money market accounts go up and down with the stock market.
a)
True
b)
False
132.
Liquidity is a major advantage to regular savings accounts.
a)
True
b)
False
133.
The law requires all financial institutions to tell consumers the annual percentage yield on their accounts.
a)
True
b)
False
134.
Certificates of deposit are less liquid than regular savings accounts.
a)
True
b)
False
135.
You may be charged a service fee if you make more than a maximum number of withdrawals from your regular savings account in one month or if your balance falls below a certain minimum.
a)
True
b)
False
136.
A regular savings account pays much more interest than a certificate of deposit.
a)
True
b)
False
137.
A combination savings-investment plan in which the money deposited is used to purchase safe, liquid securities.
a)
share account
b)
liquidity
c)
money market account
d)
CD
138.

Pete went to doctor for COVID. His co-pay is $25 for a primary doctor. The total for his visit was $142. How much does he owe?

a)

$142

b)

$25

c)

$167

d)

$117

139.

A patient is admitted to the hospital for outpatient surgery. The hospital bill total is $10,000. Their insurance plan pays 80%. How much will the patient have to pay “out of pocket”?

a)

$8,000

b)

$10,000

c)

$2,000

d)

$7.500

140.
The type of insurance that provides protection against financial loss from medical bills is called
a)
health insurance
b)
coinsurance
c)
life insurance
d)
premium
141.

A set dollar amount you agree to pay each time you receive medical treatment, while the insurance company agrees to cover the rest

a)

Copay

b)

Claim

c)

Premium

d)

Deductable

142.

A payment made monthly, twice a year, or yearly, for an insurance policy.

a)

Premium

b)

Copay

c)

Tax

d)

Benefit

143.

Which type of insurance would most likely cover damage to your home caused by a fire?

a)

Life insurance

b)

Health insurance

c)

Auto insurance

d)

Homeowners insurance

144.

What is the main reason people purchase insurance policies?

a)

To avoid paying taxes

b)

To guarantee investment returns

c)

To protect themselves financially from unexpected events

d)

To increase their credit score

145.

What does a coverage limit in an insurance policy represent?

a)

The maximum amount the insurance company will pay for a covered loss

b)

The monthly premium you pay for the policy

c)

The minimum amount you must pay for a claim

d)

The number of claims you can file per year

146.

Which type of insurance would most likely cover medical expenses if you are injured in a car accident caused by another driver?

a)

Bodily injury liability coverage

b)

Comprehensive auto insurance

c)

Life insurance

d)

Health insurance

147.

Which of the following is typically NOT covered by a standard homeowners insurance policy?

a)

Flood damage

b)

Theft of personal property

c)

Liability for injuries on your property

d)

Fire damage

148.

Which of the following insurance coverage options would be the lowest priority for a typical single person, with no children, 1-2 years out of high school?

a)

Health Insurance

b)

Auto Insurance (if they have a car)

c)

Life Insurance

d)

Renter’s Insurance (if they are renting an apartment)

149.

What type of auto insurance are you required to carry in almost every state?

a)

Insurance if you damage your own property

b)

Insurance if you cause injury to another person

c)

Insurance in case you get into an accident with someone who does not have insurance

d)

Insurance if you cause injury to yourself

150.

Your renter’s insurance policy costs $25/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 laptop set. How much would your insurance company pay?

a)

$0

b)

$200

c)

$800

d)

$1,000

151.

Checking accounts are always free to open and use.

a)

True

b)

False

152.

Most banks and credit cards companies calculate interest using the simple interest method.

a)

True

b)

False

153.

In the United States, the government plays the greatest role in determining how money is moving within the economy.

a)

True

b)

False

154.

Bill payment services allow you to schedule recurring payments in advance.

a)

True

b)

False

155.

Experts suggest that when shopping online, it's safer to use a debit card than a credit card.

a)

True

b)

False

156.

The APR (annual percentage rate) is the effective rate of interest when compounding is factored in.

a)

True

b)

False

157.

A qualified indorsement limits the liability of the indorser.

a)

True

b)

False

158.

Which type of account is best suited for frequent transactions?

a)

Savings account

b)

Checking account

c)

Certificate of deposit

d)

Money market account

159.

Which of the following is NOT a feature of a money market account?

a)

Limited check writing

b)

Higher interest rates than regular savings accounts

c)

Minimum balance requirements

d)

Unlimited withdrawals without penalty

160.

Writing a check for more than the balance of your checking account is called a(n):

a)

overdraft.

b)

stale check.

c)

post-dated check.

d)

endorsement.

161.

Which of the following directly transfers money from a person's account to the account of a retailer (store, restaurant, etc.)?

a)

charge card

b)

credit card

c)

debit card

d)

cash card

162.

Which is more liquid?

a)

a transaction account

b)

a time deposit

163.

Which of the following is the MOST liquid?

a)

money market account

b)

certificate of deposit

c)

checking account

d)

savings account

164.

Generally speaking, when interest rates are high, more credit is accessible and the economy tends to grow quickly.

a)

True

b)

False

165.

If the reserve requirement is raised, there will be more money available in the economy.

a)

True

b)

False

166.

The US government has complete control over the money supply and money circulation.

a)

True

b)

False

167.

An increase in the money supply and incomes often causes prices to rise.

a)

True

b)

False

168.

What is the effect of lowering the discount rate by the Federal Reserve?

a)

It discourages banks from lending and decreases the money supply.

b)

It makes government bonds more expensive.

c)

It raises taxes for consumers.

d)

It encourages banks to borrow more and increases the money supply.

169.

How many federal districts are there?

a)

12

b)

25

c)

30

d)

7

170.

The FED's open market operations refers to

a)

changing the interest rate on loans

b)

paying member banks interest on the money they hold in reserve

c)

The buying or selling of bonds

d)

raising or lowering the discount rate

171.
The primary role of the Federal Reserve Bank is to steer the economy by
a)
controlling the budget
b)
setting spending levels.
c)
controlling the money supply.
d)
loaning out money.
172.
The Federal Reserve System was established in
a)
1799
b)
1913
c)
1863
d)
1881
173.

Which action would the Federal Reserve most likely take to encourage borrowing and spending?

a)

Sell government securities

b)

Raise the discount rate

c)

Lower interest rates

d)

Increase the reserve requirement

174.

Which of the following is an example of fiat money?

a)

A gold coin

b)

A silver bar

c)

A US dollar bill

d)

A diamond

175.

Who controls monetary policy in the United States?

a)

The President

b)

The Federal Reserve

c)

Congress

d)

The Supreme Court

176.

How does the multiplier effect create more money in the economy?

a)

By increasing taxes to collect more revenue.

b)

By encouraging people to save more. by paying higher interest rates.

c)

By turning a deposit into a loan which becomes a new deposit somewhere else.

d)

By reducing government spending.

177.

The Federal Reserve might drop interest rates to stimulate the economy and encourage borrowing.

a)

True

b)

False

178.

All banks in the United States today are owned by the government.

a)

True

b)

False

179.

Banking laws guarantee that there will never be another banking crisis.

a)

True

b)

False

180.

A loosening of lending oversight standards contributed to the most recent mortgage crisis?

a)

True

b)

False

181.

A medium of exchange is anything people use to trade things of value.

a)

True

b)

False

182.

The US government began printing paper currency in 1776.

a)

True

b)

False

183.

Money deposited in bank accounts have always been insured in case of bank failures.

a)

True

b)

False

184.

Who believed that a national, central banking system would give too much power to too few people?

a)

Alexander Hamilton

b)

Thomas Jefferson

c)

George Washington

d)

All answers are correct.

185.

Why does the government bail out banks when they are in danger of going bankrupt?

a)

The government bails out all types of business when they are in danger of going bankrupt.

b)

The government bails out banks because they own the banks.

c)

The government bails out banks because they are essential to a functional US economy.

d)

All answers are correct.

186.

Money that is produced without the legal sanction of the government is called:

a)

counterfeit money.

b)

fiat money.

c)

fictional money.

d)

corrosive money.

187.

Why were banks deregulated?

a)

to allow for more governmental control

b)

to allow for more competition

c)

to allow for more consistent fees

d)

All answers are correct.

188.

Actual cash kept on hand at the bank is called the bank's:

a)

reserves.

b)

credit.

c)

deposits.

d)

backup cash.

189.

Today, commercial banks offer their services only to businesses.

a)

True

b)

False

190.

Banks can go out of business if they don't make enough profit.

a)

True

b)

False

191.

Which asset is most liquid?

a)

cash in your pocket

b)

money in your checking account

c)

money in your retirement plan

d)

your computer

192.

You can open a checking account at all of the following types of financial institutions EXCEPT at a

a)

central bank.

b)

commercial bank.

c)

retail bank.

d)

credit union.

193.

Which of the following is NOT a source of income for a bank?

a)

interest earned by depositors

b)

investments

c)

interest received on loans

d)

fees for service

194.

Which type of bank serves as the government’s bank?

a)

central bank

b)

commercial bank

c)

retail bank

d)

All of the answers are correct.

195.

What is it called when one or more banks join or acquire another bank?

a)

niche market

b)

consolidation

c)

merger

d)

competition

196.

An agreed upon system for measuring the value of goods and services is called a(n)

a)

liability.

b)

depository.

c)

spread.

d)

medium of exchange.

197.

What might happen if people stopped making deposits into bank accounts?

a)

The bank wouldn't be able to provide as many loans.

b)

The bank would make a lot more profit.

c)

The economy would grow more quickly.

d)

More people would be able to buy new cars and homes.

198.

Why aren’t bank deposits considered a form of bank income?

a)

Banks must use deposits to provide loans.

b)

Only interest earned on loans is considered income.

c)

Banks must pay the deposits back to the depositors.

d)

Banks don’t earn any income.

199.

Why did retail banks develop?

a)

Commercial banks didn’t offer services to businesses.

b)

Commercial banks didn’t offer services to individuals.

c)

Commercial banks did not provide loans.

d)

Commercial banks only served the government.

200.

Which is NOT a function of a central bank?

a)

Conduct monetary policy

b)

Provide checking accounts to individuals

c)

Issue currency

d)

Serve as the government's bank