WorksheetsPersonal Finance & Banking Pretest
Total questions: 30
Worksheet time: 38mins
Which statement best describes the primary role of banks in the economy?
To set tax rates for individuals and businesses
To store government money only
To accept deposits and provide loans to individuals and businesses
To regulate stock market prices
Which type of financial institution is most likely to be owned by its members rather than shareholders?
Commercial bank
Credit union
Investment bank
Insurance company
Online banking and mobile apps are examples of:
Traditional banking
Central banking
Electronic banking
International banking
One major impact of electronic banking on the banking industry is:
Increased need for physical branch locations
Reduced customer access to accounts
Faster and more convenient financial transactions
Elimination of all banking fees
Which service is typically offered by banks to consumers?
Auto insurance
Checking and savings accounts
Stock market regulation
Tax preparation only
Which banking service is most commonly used by businesses?
Personal savings accounts
Business loans and lines of credit
Student checking accounts
Retirement pensions
Competition in the banking industry benefits consumers mainly by:
Eliminating all financial risk
Reducing the need for government regulation
Encouraging better services and lower costs
Guaranteeing higher interest rates on all accounts
Which factor increases competition among banks?
Fewer financial institutions
Limited customer choices
Online-only banks entering the market
Higher government ownership of banks
All banks offer the exact same services and charge the same fees.
True
False
Electronic banking allows customers to manage accounts without visiting a physical branch.
True
False
Credit unions and banks serve similar purposes but are structured differently.
True
False
Competition among banks has no effect on customer service.
True
False
What is one advantage of electronic banking for consumers?
Name two services commonly offered by banks to consumers.
How can competition influence the services or fees offered by banks?
A customer is deciding between a traditional bank with many branch locations and an online-only bank. Identify one possible benefit of choosing an online-only bank.
A customer is deciding between a traditional bank with many branch locations and an online-only bank. Identify one possible drawback.
A small business needs money to expand operations. Which type of banking service would best meet this need, and why?
In your own words, explain what you already know about how banks compete for customers.
Which type of bank primarily works with everyday consumers and businesses by accepting deposits and making loans?
Investment bank
Commercial bank
Central bank
Hedge fund
Investment banks are most likely to be involved in:
Checking and savings accounts
Mortgage lending to individuals
Underwriting stocks and bonds
Providing FDIC insurance
Which financial institution typically focuses on long-term savings and retirement accounts?
Commercial bank
Credit union
Brokerage or investment firm
Payday lender
The FDIC primarily exists to:
Set interest rates
Protect bank profits
Insure customer deposits
Approve all bank loans
The Glass-Steagall Act was originally designed to:
Encourage banks to take more risks
Separate commercial and investment banking activities
Eliminate bank competition
Replace the Federal Reserve
The Dodd-Frank Act was passed mainly in response to:
The Great Depression
The dot-com bubble
The 2008 financial crisis
World War II
One major goal of modern banking regulations is to:
Eliminate all bank failures
Increase consumer protection and financial stability
Guarantee profits for banks
Remove government oversight
Banks make money primarily by:
Charging customers to open accounts only
Investing all customer deposits in the stock market
Lending money at higher interest rates than they pay on deposits
Receiving money from the federal government
Which is an example of a non-interest source of income for banks?
Mortgage interest
Credit card interest
Account fees and service charges
Business loan interest
Why might strong banking regulations benefit consumers?
Explain one way a bank might earn money from a checking account.
