#1
Which of the following is a function of central banks in a monetary system?
Issuing currency
Granting loans to individuals
Regulating stock markets
Managing retail banking operations
#2
What is the term used to describe the process of converting bank deposits into financial instruments that can be traded on the market?
Securitization
Derivatization
Fractional reserve banking
Quantitative easing
#3
What is the primary objective of a central bank's monetary policy?
Maximizing employment
Minimizing inflation
Stabilizing exchange rates
Encouraging economic growth
#4
What is the purpose of open market operations conducted by central banks?
Regulating inflation
Stabilizing exchange rates
Controlling the money supply
Supervising commercial banks
#5
What is the term for the risk that a borrower may default on their loan obligations?
Credit risk
Market risk
Liquidity risk
Operational risk
#6
What is the primary tool used by central banks to control the money supply?
Fiscal policy
Interest rates
Foreign exchange interventions
Taxation
#7
What is the term for the interest rate at which commercial banks can borrow reserves from the central bank?
Prime rate
Discount rate
Federal funds rate
LIBOR rate
#8
What is the function of the Federal Open Market Committee (FOMC) in the United States?
Setting monetary policy
Regulating commercial banks
Supervising stock exchanges
Issuing government bonds
#9
Which of the following is NOT considered a component of the M1 money supply?
Currency in circulation
Demand deposits
Savings deposits
Traveler's checks
#10
Which entity typically regulates and supervises the banking system in a country?
Ministry of Finance
Central Bank
International Monetary Fund (IMF)
World Trade Organization (WTO)
#11
What is the purpose of reserve requirements imposed by central banks on commercial banks?
To ensure solvency of commercial banks
To limit lending capacity
To encourage investment in the stock market
To regulate foreign exchange rates
#12
In the context of banking operations, what does the term 'Liquidity Risk' refer to?
The risk of loss due to changes in interest rates
The risk of loss due to insufficient cash to meet obligations
The risk of loss due to defaults on loans
The risk of loss due to changes in exchange rates
#13
What is the role of the lender of last resort function performed by central banks?
To provide long-term loans to individuals
To offer low-interest loans to governments
To provide emergency funding to financial institutions
To regulate interest rates in the market
#14
Which international organization acts as a lender of last resort for countries facing balance of payment crises?
International Monetary Fund (IMF)
World Bank
Bank for International Settlements (BIS)
Asian Development Bank (ADB)
#15
Which of the following is a function of the Bank for International Settlements (BIS)?
Issuing currency
Conducting monetary policy
Facilitating cooperation among central banks
Providing loans to member countries