#1
Which of the following is not a type of financial account?
Transaction account
ExplanationTransaction accounts are a type of financial account.
#2
What is the primary function of a bank?
Accepting deposits and lending money
ExplanationBanks primarily function by accepting deposits and lending money.
#3
What does the term 'FDIC' stand for in banking?
Federal Deposit Insurance Corporation
ExplanationFDIC stands for Federal Deposit Insurance Corporation.
#4
What is the maximum limit of FDIC insurance coverage per depositor per bank?
$250,000
ExplanationThe maximum limit of FDIC insurance coverage per depositor per bank is $250,000.
#5
What is the purpose of a SWOT analysis in financial planning?
To evaluate the potential risks and opportunities in the financial market
ExplanationSWOT analysis evaluates potential risks and opportunities in the financial market.
#6
Which of the following is a characteristic of a money market account?
Higher interest rates than savings accounts
ExplanationMoney market accounts typically offer higher interest rates than savings accounts.
#7
Which financial institution typically offers the highest interest rates on deposits?
Credit union
ExplanationCredit unions typically offer higher interest rates on deposits.
#8
What does the term 'APY' stand for in banking?
Annual Percentage Yield
ExplanationAPY stands for Annual Percentage Yield in banking.
#9
In banking, what is 'KYC'?
Know Your Customer
ExplanationKYC stands for Know Your Customer in banking.
#10
What is the main purpose of the SWIFT network in the financial industry?
Facilitating communication between banks for international transactions
ExplanationSWIFT network facilitates communication between banks for international transactions.
#11
What is the role of an investment banker?
Underwriting securities issuance
ExplanationInvestment bankers underwrite securities issuance.
#12
What is a 'liquidity ratio' used for in financial analysis?
To measure a company's ability to meet short-term obligations
ExplanationLiquidity ratio measures a company's ability to meet short-term obligations.
#13
What is the role of the Federal Reserve in the United States banking system?
Regulating banks and monetary policy
ExplanationThe Federal Reserve regulates banks and monetary policy.
#14
What is a 'prime rate' in banking?
The interest rate charged by banks to their most creditworthy customers
ExplanationPrime rate is the interest rate charged by banks to their most creditworthy customers.
#15
What is the purpose of a 'limit order' in stock trading?
To buy or sell a stock only if it reaches a specified price
ExplanationLimit order is used in stock trading to buy or sell a stock only if it reaches a specified price.
#16
What is 'leverage' in financial markets?
The ratio of debt to equity in a company's capital structure
ExplanationLeverage is the ratio of debt to equity in a company's capital structure.
#17
What is the primary purpose of the Federal Deposit Insurance Corporation (FDIC) in the United States?
To insure bank deposits against bank failures
ExplanationFDIC insures bank deposits against bank failures.