#1
Which of the following is a basic function of a commercial bank?
Issuing passports
Providing healthcare services
Accepting deposits
Managing transportation services
#2
What does APR stand for in the context of banking?
Average Percentage Rate
Annual Percentage Rate
Adjusted Personal Revenue
Average Personal Return
#3
What does FDIC stand for in the context of banking?
Federal Department of Investment and Commerce
Financial Disclosure and Investment Control
Federal Deposit Insurance Corporation
Fiscal Development and Investment Council
#4
What is the purpose of a 'debit card'?
To borrow money from a bank
To make purchases using funds directly from the cardholder's bank account
To transfer money between different bank accounts
To earn interest on savings
#5
What is the purpose of a 'mortgage'?
To provide short-term loans for businesses
To invest in stocks and bonds
To purchase real estate by borrowing money from a lender
To pay off credit card debt
#6
What does the term 'compound interest' mean in finance?
Interest calculated only on the initial principal
Interest paid in installments
Interest calculated on the initial principal and also on the accumulated interest from previous periods
Interest paid in advance
#7
What is the purpose of a 'certificate of deposit' (CD)?
To certify ownership of a company
To provide insurance coverage for deposits
To earn a fixed interest rate for a specified period of time
To authorize a bank to make automatic payments
#8
What is the primary function of the Federal Reserve System in the United States?
Issuing currency
Regulating interest rates
Supervising stock markets
Enforcing tax policies
#9
What does the term 'mutual fund' refer to in finance?
A type of savings account
A form of insurance policy
An investment vehicle that pools money from multiple investors to buy securities
A government subsidy program for low-income families
#10
In finance, what does the term 'liquidity' refer to?
The ability to easily convert assets into cash without significant loss of value
The total value of a company's outstanding shares
The rate at which the value of a currency decreases over time
The total value of a company's assets minus its liabilities
#11
What is the purpose of a '401(k)' retirement plan?
To provide health insurance for retirees
To provide long-term care for the elderly
To offer tax-deferred savings for retirement
To provide monthly income after retirement
#12
What is the main function of an investment bank?
Accepting deposits from the public
Providing loans to individuals and businesses
Underwriting securities and facilitating mergers and acquisitions
Providing financial advice to retirees
#13
What is the purpose of the Securities and Exchange Commission (SEC) in the United States?
Regulating banks
Enforcing tax laws
Regulating the securities industry and protecting investors
Issuing currency
#14
What is the primary function of a credit union?
Issuing credit cards
Providing investment advice
Providing financial services to a specific group of members
Regulating interest rates
#15
What is the purpose of a 'credit score'?
To measure an individual's financial assets
To assess an individual's credit risk
To determine an individual's annual income
To evaluate an individual's investment portfolio
#16
What does the term 'dividend' refer to in finance?
The portion of a company's earnings distributed to its shareholders
The interest paid on a bond
The increase in the value of an asset over time
The fee charged by a broker for executing a trade
#17
What does the term 'derivative' refer to in finance?
A type of savings account
A financial instrument whose value is derived from the value of an underlying asset
A form of insurance policy
A government subsidy program for low-income families
#18
What is the purpose of the Dodd-Frank Wall Street Reform and Consumer Protection Act?
To regulate interest rates
To provide tax incentives for small businesses
To regulate the financial industry and protect consumers from abusive practices
To provide subsidies for the agriculture sector
#19
What does the term 'leverage' mean in finance?
The process of diversifying investments across different asset classes
The use of borrowed funds to increase the potential return on investment
The process of issuing new shares of stock
The process of calculating compound interest