Question

QUESTION 1: MCQ

1. Provided that the bank is a financial intermediary, the primary service the bank offers in order to make profits is:
   1. Granting loans and advances to clients
   2. Investing in securities
   3. Holding interbank deposits
   4. Holding as much excess reserves as possible

2. Deposits at the bank are considered ______ of funds for the bank, while Bank Bonds and Borrowings are regarded as _____ of funds and loans as _____ of funds for the bank.

1. Sources, uses, sources
2. Uses, sources, sources
3. Sources, sources, uses
4. Sources, uses, uses

3. A letter of guarantee is:
   1. A payment undertaking
   2. A type of letter of credit
   3. A commitment on the bank only
   4. A payment instrument

4. When having a current account:
   1. No cheques can be written on the account
   2. Interest is calculated on a daily basis on the account balance
   3. A 7 days notice of withdrawal should be given
   4. A mandate from the customer - the account owner - needs to be obtained in order to perform a transfer of money to another bank account

5. Banks Savings products offered to customers are:
   1. Finance institutions and venture capital
   2. Life insurance and loan accounts
   3. Savings accounts and Certificate of Deposits
   4. Vaults and current accounts

Answer 1

Primary service offered by a Bank in order to make profit is granting loans and advances to clients.Answer is choice (i)

Deposits at the bank are considered sources of funds for the bank, while Bank Bonds and Borrowings are regarded as sources of funds and loans as uses of funds for the bank. Answer is choice (iii)

A letter of guarantee is: A payment undertaking by a bank, that in the event of the customer failing its obligation, bank will make payment. Answer is choice (i)

When having a current account: A mandate from the customer - the account owner - needs to be obtained in order to perform a transfer of money to another bank account Answer is choice (iv)

Banks Savings products offered to customers are: Savings accounts and Certificate of Deposits. Answer is choice (iii)