#1
Which of the following is an example of a financial transaction?
Buying groceries with cash
ExplanationA common exchange of goods or services for money.
#2
What is the primary purpose of a bank statement?
To show the customer's transaction history
ExplanationProvides a record of all transactions within a specific period.
#3
What does KYC stand for in banking?
Know Your Customer
ExplanationA process to verify customer identity to prevent fraud and money laundering.
#4
Which of the following is a common method of customer authentication in online banking?
Biometric scans
ExplanationUses unique physical characteristics like fingerprints or facial recognition.
#5
What does ACH stand for in banking?
Automated Clearing House
ExplanationElectronic network for processing financial transactions in the United States.
#6
What does APR stand for in finance?
Annual Percentage Rate
ExplanationIndicates the yearly cost of borrowing or earning through investment.
#7
In banking, what is the purpose of a wire transfer?
To transfer funds electronically from one bank to another
ExplanationEnables swift movement of money between accounts at different financial institutions.
#8
What is the purpose of a credit score?
To determine a customer's eligibility for a loan or credit card
ExplanationEvaluates creditworthiness based on credit history and financial behavior.
#9
What is a mutual fund?
A pool of funds collected from many investors to invest in securities
ExplanationDiversified investment vehicle managed by professionals.
#10
What is the purpose of a routing number in banking?
To identify a specific bank branch
ExplanationDirects electronic transfers to the correct financial institution.
#11
What is a chargeback in the context of credit card transactions?
A reversal of a disputed transaction
ExplanationOccurs when a cardholder disputes a charge and funds are returned to their account.
#12
What is the purpose of a SWIFT code in international transactions?
To identify a specific bank during an international transaction
ExplanationFacilitates secure and standardized communication between financial institutions globally.
#13
What is the purpose of a stock exchange?
To buy and sell shares of publicly traded companies
ExplanationFacilitates trading of securities between buyers and sellers.
#14
What is the purpose of a dividend in finance?
To distribute profits to shareholders
ExplanationPortion of a company's earnings distributed to its shareholders.
#15
What is the purpose of a futures contract in finance?
To provide insurance against market fluctuations
ExplanationAgreement to buy or sell a commodity or financial instrument at a predetermined price in the future.