Financial Transactions and Banking Concepts Quiz

Challenge yourself with questions on APR, routing numbers, credit scores, FDIC, compound interest, and more! Learn key banking concepts in this quiz.

Practice Learn Test

What does APR stand for in banking?

Average Percentage Rate

Annual Percentage Rate

Asset Protection Ratio

Adjusted Principal Return

What is the function of a routing number in banking?

To identify the bank

To identify the account holder

To authorize transactions

To calculate interest rates

What is the purpose of a credit score?

To measure an individual's creditworthiness

To calculate annual income

To determine the interest rate on savings accounts

To track monthly expenses

What does FDIC stand for in the context of banking regulations?

Federal Deposit Investment Corporation

Financial Data and Information Consortium

Federal Deposit Insurance Corporation

Financial Disclosure and Insurance Committee

What is the purpose of a cashier's check?

To withdraw cash from an ATM

To transfer money between bank accounts

To make a guaranteed payment from the bank's funds

To purchase goods or services online

What does 'ATM' stand for in the context of banking?

Automated Teller Machine

Automatic Transaction Mechanism

Account Transfer Module

All Transaction Mode

What is the purpose of a SWIFT code in international banking?

To identify the country

To identify the bank and branch

To calculate exchange rates

To verify account ownership

1 answered

What is the primary function of the Federal Reserve System in the United States?

Regulating international trade

Issuing currency

Supervising stock markets

Controlling monetary policy

What is the difference between a debit card and a credit card?

Debit cards withdraw money directly from the linked bank account, while credit cards borrow money from the issuing bank.

Debit cards are used for online transactions only, while credit cards are used for in-person purchases.

Debit cards have higher interest rates than credit cards.

Credit cards have daily spending limits, while debit cards do not.

#10

What is the primary purpose of the Dodd-Frank Wall Street Reform and Consumer Protection Act?

To deregulate the financial industry

To increase government intervention in financial markets

To prevent future financial crises and protect consumers

To abolish the Federal Reserve System

#11

Which of the following is NOT a type of bank account?

Checking Account

Investment Account

Savings Account

Certificate of Deposit (CD)

#12

What is the concept of 'compound interest'?

Interest calculated only on the principal amount

Interest calculated on the initial deposit plus any interest accumulated

Interest calculated separately for each transaction

Interest calculated based on the borrower's credit score

1 answered

#13

What is a 'stock split'?

When a company issues new shares of stock to existing shareholders

When a company merges with another company

When a company's stock price decreases significantly

When a company divides its existing shares into multiple shares

#14

What is the primary function of the Securities and Exchange Commission (SEC)?

To regulate banks

To regulate the stock market and protect investors

To manage government spending

To oversee international trade agreements

#15

What is the purpose of a mortgage-backed security?

To insure against the risk of default on a mortgage loan

To pool together mortgage loans and sell interests in them to investors

To provide low-interest loans to first-time homebuyers

To secure a loan with real estate property