#1
Which of the following is not a type of negotiable instrument?
Promissory note
Bill of exchange
Cheque
Invoice
#2
In banking, what does the term 'FDIC' stand for?
Federal Department of Insurance and Commerce
Financial Depository Insurance Corporation
Federal Deposit Insurance Corporation
Foreign Deposit Investment Corporation
#3
What is the role of the Federal Deposit Insurance Corporation (FDIC) in the United States?
To regulate interest rates
To provide insurance on deposits in member banks
To oversee international trade agreements
To manage foreign relations
#4
In a typical cheque transaction, who is the drawer?
The bank
The person who writes the cheque
The person to whom the cheque is payable
The clearinghouse
#5
What is the legal definition of a promissory note?
A written promise to pay a sum of money to a specified party
A document used for transferring ownership of goods
A written order to pay a specified sum of money to the bearer
A written contract between two parties to exchange goods or services
#6
Who is the drawer, drawee, and payee in a typical bill of exchange?
Drawer - bank, Drawee - customer, Payee - merchant
Drawer - customer, Drawee - bank, Payee - merchant
Drawer - merchant, Drawee - bank, Payee - customer
Drawer - merchant, Drawee - customer, Payee - bank
#7
What is 'crossing' a cheque?
Adding two parallel lines on the cheque with or without words
Signing on the back of the cheque
Writing the cheque amount in words and figures
Making the cheque payable only to the named payee
#8
What is the function of the Federal Reserve System in the United States?
Issuing currency and regulating its value
Overseeing international trade agreements
Enforcing antitrust laws
Managing foreign relations
#9
What is the primary purpose of a certificate of deposit (CD)?
To transfer ownership of stocks
To provide insurance against bank failures
To borrow money from the bank
To earn interest on a fixed amount of money for a specified period
#10
What is the purpose of a SWIFT code in banking?
To identify a specific branch of a bank
To identify a bank during international transactions
To track stock market fluctuations
To regulate interest rates
#11
Which of the following is not a characteristic of a negotiable instrument?
Transferability
Unconditional promise to pay
Fixed maturity date
Requires consideration
#12
What is the term for the interest rate at which the Federal Reserve lends to commercial banks?
Prime rate
Discount rate
LIBOR rate
Treasury rate
#13
What is a bearer instrument?
An instrument that can only be transferred to a specific person
An instrument payable to the order of a named person
An instrument that can be transferred by delivery alone
An instrument that cannot be transferred
#14
What is the purpose of Regulation CC in the United States?
Regulating credit card transactions
Regulating bank mergers
Regulating electronic fund transfers
Regulating the availability of funds and collection of checks
#15
What is the difference between a demand draft and a cashier's check?
A demand draft is drawn by the bank on itself, while a cashier's check is drawn by a customer on the bank
A demand draft is drawn by a customer on the bank, while a cashier's check is drawn by the bank on itself
There is no difference; they are synonymous terms
A demand draft is used for international transactions, while a cashier's check is used domestically
#16
Which of the following is an example of a non-cash negotiable instrument?
Cashier's check
Promissory note
Money order
Demand draft