1.
The simple interest on a $ 100 loan at 10% simple interest for 5 years is
Correct Answer
A. 50
Explanation
The correct answer is 50. This can be calculated by multiplying the principal amount ($100) by the interest rate (10%) and the time period (5 years), and then dividing the result by 100. Therefore, the simple interest on a $100 loan at 10% for 5 years would be $50.
2.
The compound interest on a $5,000 loan at 8% compounded semi-annually for 10 years is
Correct Answer
D. None
Explanation
The correct answer is "None" because compound interest is calculated using the formula A = P(1 + r/n)^(nt), where A is the final amount, P is the principal, r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, the principal is $5,000, the interest rate is 8%, the interest is compounded semi-annually (n = 2), and the time period is 10 years. Plugging these values into the formula, we can calculate the final amount and see that it is not equal to any of the given answer options.
3.
This bank was formed under the royal order.
Correct Answer
D. Chartered Bank of England
Explanation
The Chartered Bank of England is the correct answer because it was formed under a royal order. This means that it was established by a decree or command from a monarch or royal authority. The other options, such as the Bank of Venice, State Bank of Pakistan, and Bank of Barcelona, were not formed under a royal order.
4.
What is money creation bank?
Correct Answer
B. Commercial Bank
Explanation
Money creation refers to the process by which new money is introduced into the economy. Commercial banks play a significant role in this process as they have the authority to create money through lending. When a commercial bank grants a loan to a borrower, it essentially creates new money by crediting the borrower's account with the loan amount. This newly created money then enters circulation and contributes to the overall money supply in the economy. Therefore, the correct answer is the Commercial Bank.
5.
The commercial bank creates the following money:
Correct Answer
C. Credit
Explanation
The correct answer is "Credit" because commercial banks have the power to create money through the process of lending. When a bank issues a loan to a borrower, they create a new deposit in the borrower's account, which effectively increases the money supply. This money exists in the form of electronic credits in the bank's books and can be used by the borrower for various transactions. Therefore, credit creation is an important way in which commercial banks contribute to the overall money supply in an economy.
6.
The part of deposits kept with the central bank is called:
Correct Answer
A. Cash reserve
Explanation
The correct answer is "Cash reserve." This term refers to the portion of deposits that banks are required to keep with the central bank as a reserve. It is a regulatory measure that ensures banks have enough funds to meet withdrawal demands and maintain stability in the financial system. Margin refers to the collateral required for certain financial transactions, while the interest rate is the cost of borrowing or the return on savings. However, only cash reserve specifically refers to the deposits held with the central bank.
7.
"Capitalism" refers to:
Correct Answer
A. The use of markets
Explanation
"Capitalism" refers to the economic system in which markets are utilized for the exchange of goods and services. This system is characterized by private ownership of capital goods, such as factories and machinery, rather than government ownership. Additionally, private ownership of homes and cars is not exclusive to capitalism, as it can exist in other economic systems as well. Therefore, the correct answer is the use of markets, as it accurately captures the essence of capitalism.
8.
How much would the mode be if the Mean = 48 and the Median = 47?
Correct Answer
C. 45
Explanation
Since the mean is greater than the median, it suggests that there are some higher values pulling the average up. The mode represents the most frequently occurring value, and in this case, it is likely to be closer to the median. Therefore, the mode is likely to be closer to 47. Among the given options, 45 is the closest to 47, making it the most reasonable choice for the mode.
9.
The best form of a partnership deed is
Correct Answer
C. Written & registered
Explanation
A written and registered partnership deed is the best form because it provides legal documentation of the agreement between partners. It ensures clarity and prevents any misunderstandings or disputes in the future. Additionally, registering the deed with the appropriate authorities adds an extra layer of authenticity and validity to the partnership.
10.
Advertisement means
Correct Answer
A. Attracting the customers toward the product
Explanation
Advertisement refers to the act of attracting customers towards a product. It is a marketing strategy aimed at promoting and creating awareness about a particular product or service. The purpose of advertisement is to capture the attention of potential customers and persuade them to consider purchasing the product. By highlighting the features, benefits, and unique selling points of the product, advertisement aims to generate interest and create a desire among consumers to buy the product.