Banking Test Questions and answers
Which of the following is NOT a source of income for a bank?
A.
the interest earned by depositors
B.
investments
C.
loan income from interest
D.
fees for services - ANSWER>>A
The difference between what a bank pays in interest and what it receives in interest is called -
ANSWER>>Spread
True or False:
A Financial intermediary will not take a deposit for a consumer. - ANSWER>>False
Total assets minus total liabilities equals - ANSWER>>Equity
The loosening of government control is called __________ - ANSWER>>Deregulation
True or False:
Return on equity is the ratio of net income to total assets. - ANSWER>>False
About 60 percent of the deposit and loan business in the United States is done by -
ANSWER>>Commercial Banks
People who put money into banks are called ________________ - ANSWER>>Depositor
True or False:
State Farm Insurance company is an example of a depository institution. - ANSWER>>False
True or False:
A bank is a not-for-profit organization. - ANSWER>>False
, A bank evaluates the ____________ of all customers who apply for loans. -
ANSWER>>Creditworthiness
Assume that a bank receives a $5,000 deposit from a customer and lends it to another to start a
small business. The bank pays a straight 5% per year interest to the customer and charges 10%
per year for the loan. Calculate the spread for one year. - ANSWER>>$250
Banks move money between
ANSWERs:
A. other banks
B.banks and individual customers
C. governments
D. all of the above - ANSWER>>D
True or False:
General speaking, banks offer customers fewer services today than they did 20 years ago. -
ANSWER>>False
A ________ in financial terms is a cash obligation - ANSWER>>liability
Which of the following statements about banks is NOT true?
ANSWERs:
A.
Banks are essential to maintaining the economy.
B.
Banks distribute the medium of exchange.
C.
All banks are organized as corporations.
D.
Banks may be chartered by either federal or state governments. - ANSWER>>C
Goliath Bank has paid out $20,000 in interest and brought in $50,000. What is the bank spread?
- ANSWER>>$30,000
True or False: All banks are federally chartered? - ANSWER>>False
A(n) ___________ occurs when one or more banks join or acquire another bank or banks -
ANSWER>>merger
Which of the following is NOT a source of income for a bank?
A.
the interest earned by depositors
B.
investments
C.
loan income from interest
D.
fees for services - ANSWER>>A
The difference between what a bank pays in interest and what it receives in interest is called -
ANSWER>>Spread
True or False:
A Financial intermediary will not take a deposit for a consumer. - ANSWER>>False
Total assets minus total liabilities equals - ANSWER>>Equity
The loosening of government control is called __________ - ANSWER>>Deregulation
True or False:
Return on equity is the ratio of net income to total assets. - ANSWER>>False
About 60 percent of the deposit and loan business in the United States is done by -
ANSWER>>Commercial Banks
People who put money into banks are called ________________ - ANSWER>>Depositor
True or False:
State Farm Insurance company is an example of a depository institution. - ANSWER>>False
True or False:
A bank is a not-for-profit organization. - ANSWER>>False
, A bank evaluates the ____________ of all customers who apply for loans. -
ANSWER>>Creditworthiness
Assume that a bank receives a $5,000 deposit from a customer and lends it to another to start a
small business. The bank pays a straight 5% per year interest to the customer and charges 10%
per year for the loan. Calculate the spread for one year. - ANSWER>>$250
Banks move money between
ANSWERs:
A. other banks
B.banks and individual customers
C. governments
D. all of the above - ANSWER>>D
True or False:
General speaking, banks offer customers fewer services today than they did 20 years ago. -
ANSWER>>False
A ________ in financial terms is a cash obligation - ANSWER>>liability
Which of the following statements about banks is NOT true?
ANSWERs:
A.
Banks are essential to maintaining the economy.
B.
Banks distribute the medium of exchange.
C.
All banks are organized as corporations.
D.
Banks may be chartered by either federal or state governments. - ANSWER>>C
Goliath Bank has paid out $20,000 in interest and brought in $50,000. What is the bank spread?
- ANSWER>>$30,000
True or False: All banks are federally chartered? - ANSWER>>False
A(n) ___________ occurs when one or more banks join or acquire another bank or banks -
ANSWER>>merger
