Banking Basics And Services Quiz! Exam
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The business dealing with money and credit is:
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Banking
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Health care
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Education
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Technology
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Banking is all about managing, saving, lending money, credit/ loan, and other financial transactions. A bank provides financial assistance by accepting deposits from the public and creating credit. There are several schemes offered by banks like savings accounts, home mortgages, business loans, and car loans, etc. This quiz will test your knowledge about banking and services. Let's try it out. See more
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- 2.
The amount of money a bank charges for the privilege of allowing a person to borrow money or the amount of money the bank pays a person to deposit his money for the bank to invest is called?
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Loan
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Mortgage
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Interest
Correct Answer
A. InterestExplanation
Interest is the correct answer because it refers to the amount of money that a bank charges for lending money to someone or the amount of money that a bank pays to someone for depositing their money. It is a fee or compensation for the use of borrowed money or for allowing the bank to use deposited funds for investment purposes. Interest is a common concept in banking and finance, representing the cost of borrowing or the return on investment.Rate this question:
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- 3.
The money that a person borrows from a bank or other financial institutions is called a:
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Interest
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Commercial
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Loan
Correct Answer
A. LoanExplanation
A loan is the correct answer because it refers to the money that a person borrows from a bank or other financial institutions. It is a contractual agreement between the borrower and the lender, where the borrower agrees to repay the borrowed amount along with interest over a specified period of time. Loans are commonly used for various purposes such as purchasing a house, car, or funding education.Rate this question:
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- 4.
The money that a person places in a bank account for the bank to use to invest and that also earns interest is called a:
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Loan
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Deposit
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Mortgage
Correct Answer
A. DepositExplanation
A deposit refers to the money that an individual places in a bank account for the bank to use for investment purposes. This money also earns interest, meaning that the individual will receive additional funds based on the interest rate set by the bank. A deposit is different from a loan, which involves borrowing money from the bank, and a mortgage, which is a loan specifically for purchasing real estate.Rate this question:
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- 5.
A loan to pay for a home, business or other real estates over a period of time is a:
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Deposit
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Bankruptcy
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Mortgage
Correct Answer
A. MortgageExplanation
A mortgage is a loan that is used to finance the purchase of a home, business, or other real estate property. It is typically repaid over a period of time, usually with interest. Unlike a deposit, which is an amount of money placed into an account, or bankruptcy, which is a legal status indicating that a person or business is unable to repay their debts, a mortgage specifically refers to a loan for real estate purposes.Rate this question:
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- 6.
When a person publicly announces they cannot repay their loans it is called:
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Deposit
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Bankruptcy
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Mortgage
Correct Answer
A. BankruptcyExplanation
When a person publicly announces they cannot repay their loans, it is referred to as bankruptcy. Bankruptcy is a legal status that indicates an individual or organization's inability to repay their debts. It involves a formal declaration and can lead to the liquidation of assets or the establishment of a repayment plan. By declaring bankruptcy, the person acknowledges their financial difficulties and seeks legal protection from creditors.Rate this question:
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- 7.
Groups of people such as workers who pool their money together for savings and to make loans is called a:
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Labor union
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Credit union
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State of the union
Correct Answer
A. Credit unionExplanation
A credit union is a type of financial institution where groups of people, such as workers, come together to pool their money for savings and to provide loans to its members. Unlike traditional banks, credit unions are non-profit organizations that are owned and operated by their members. They offer various financial services, including savings accounts, loans, and other banking services. Therefore, the correct answer for this question is credit union.Rate this question:
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- 8.
A credit report is:
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A list of you financial assets and liabilities
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Your monthly credit card statement
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A loan and bill payment history
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Your credit line with your financial institution
Correct Answer
A. A loan and bill payment historyExplanation
A credit report is a record of an individual's borrowing and repayment activities. It includes information about loans, credit cards, and bills, as well as the payment history associated with them. This report helps lenders and financial institutions assess a person's creditworthiness and determine their ability to repay debts. It does not include a list of financial assets and liabilities or a monthly credit card statement.Rate this question:
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- 9.
Negative financial information can stay on your credit report for?
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2 years
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5 years
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7 years
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10 years
Correct Answer
A. 7 yearsExplanation
Negative financial information can stay on your credit report for 7 years. This includes late payments, foreclosures, bankruptcies, and collections. During this time, lenders and creditors can assess your creditworthiness based on this information. After 7 years, the negative information should be removed from your credit report, allowing you to rebuild your credit history.Rate this question:
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- 10.
In financial transactions, a CD is a:
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Certificate of Debt
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Certificate of Deposit
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Citizen's Deposit
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Certificate of Collateral
Correct Answer
A. Certificate of DepositExplanation
A CD, in financial transactions, refers to a Certificate of Deposit. This is a type of time deposit offered by banks and financial institutions, where individuals deposit a certain amount of money for a fixed period of time, typically ranging from a few months to several years. In return, the depositor receives a certificate that represents their investment, along with a fixed interest rate. The funds deposited in a CD are generally not accessible until the maturity date, making it a low-risk investment option for individuals looking to earn interest on their savings.Rate this question:
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- 11.
A ____________________ is used to add funds to a bank account.
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Check
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Deposit slip
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Signature card
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Withdrawal slip
Correct Answer
A. Deposit slipExplanation
A deposit slip is used to add funds to a bank account. This slip is filled out by the account holder and includes their account number, the amount being deposited, and any other necessary information. The deposit slip is then submitted to the bank along with the funds, allowing the bank to accurately credit the account with the deposited amount.Rate this question:
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- 12.
A service charge on your bank statement will result in:
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A higher balance
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A lower balance
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Earning more interest
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More outstanding checks
Correct Answer
A. A lower balanceExplanation
A service charge on your bank statement will result in a lower balance because the charge is deducted from your account. This means that the amount of money available in your account will decrease, resulting in a lower balance.Rate this question:
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- 13.
A pawnshop offers loans to people starting their own business.
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True
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False
Correct Answer
A. FalseExplanation
A pawnshop primarily offers loans to individuals who provide collateral in the form of valuable items such as jewelry or electronics. These loans are typically short-term and are not specifically targeted towards people starting their own business. Therefore, the statement is false.Rate this question:
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- 14.
Opening a checking account requires completing a signature card.
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True
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False
Correct Answer
A. TrueExplanation
Opening a checking account requires completing a signature card because a signature card is a document that verifies the account holder's identity and provides their signature for future reference. This card is necessary to ensure that the account holder has authorized any transactions made on the account. Therefore, it is a standard procedure for banks to require customers to complete a signature card when opening a checking account.Rate this question:
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- 15.
A blank endorsement allows anyone to cash a check.
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True
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False
Correct Answer
A. TrueExplanation
A blank endorsement refers to signing a check without specifying a particular payee. By doing so, the check becomes payable to the bearer, which means anyone who possesses the check can cash it. Therefore, it is true that a blank endorsement allows anyone to cash a check.Rate this question:
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- 16.
A outstanding check refers to one written on an account with a very low balance.
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True
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False
Correct Answer
A. FalseExplanation
An outstanding check does not refer to a check written on an account with a very low balance. Instead, it refers to a check that has been issued by the account holder but has not yet been cashed or deposited by the recipient.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
ProProfs Editorial Team -
Sep 16, 2008Quiz Created by
Ahubbard
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