#1
Which of the following is a basic function of a bank?
Facilitating financial transactions
ExplanationFacilitating transactions between individuals, businesses, and governments to manage money, deposits, and withdrawals.
#2
What does 'ATM' stand for in the context of banking?
Automated Teller Machine
ExplanationAn electronic banking outlet that allows customers to complete basic transactions without the aid of a branch representative.
#3
In the context of banking, what does 'ACH' stand for?
Automated Clearing House
ExplanationA secure electronic network for financial transactions in the United States.
#4
In banking, what does the term 'ACH' stand for?
Automated Clearing House
ExplanationA secure electronic network for financial transactions in the United States.
#5
What is the primary purpose of the Federal Reserve in the United States?
Conducting monetary policy and regulating banks
ExplanationThe central banking system of the United States, responsible for conducting monetary policy, supervising and regulating banks, and maintaining financial stability.
#6
Which financial document represents ownership in a corporation?
Stock certificate
ExplanationA legal document that certifies ownership of a specific number of shares in a corporation.
#7
What is the function of the SWIFT code in international banking?
Facilitating communication between banks during international transactions
ExplanationA standard format of Bank Identifier Codes (BIC) used to facilitate international banking transactions.
#8
In banking terms, what does 'APR' stand for?
Annual Percentage Rate
ExplanationThe annual rate charged for borrowing or earned through an investment, expressed as a percentage.
#9
What is the primary role of the International Monetary Fund (IMF) in the global financial system?
Providing loans to member countries
ExplanationAn international financial institution that provides financial assistance and advice to member countries.
#10
What is the term for the interest rate at which a central bank lends to commercial banks?
Discount rate
ExplanationThe interest rate set by a central bank at which it lends money to commercial banks.
#11
What is the primary function of the FDIC (Federal Deposit Insurance Corporation) in the United States?
Ensuring the safety of bank deposits
ExplanationA United States government corporation providing deposit insurance to depositors in U.S. commercial banks and savings institutions.
#12
Which financial term represents the process of spreading investments across different assets to reduce risk?
Diversification
ExplanationA risk management technique that mixes a wide variety of investments within a portfolio.
#13
What is the primary purpose of the Basel III framework in banking?
Strengthening bank capital requirements and risk management
ExplanationA set of international banking regulations developed to promote stability in the international financial system.
#14
Which financial instrument represents a loan made to a government or corporation, typically with periodic interest payments?
Bond
ExplanationA debt investment in which an investor loans money to an entity that borrows the funds for a defined period at a fixed interest rate.