The following Retail Banking Industry and Processes MCQs have been compiled by our experts through research, in order to test your knowledge of the subject of Retail Banking Industry and Processes. We encourage you to answer these 80+ multiple-choice questions to assess your proficiency.
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A. You have to earn at least $100,000 in salary to be allowed to buy a CD
B. It is just a different name for a savings account
C. It requires that the funds be kept in the account for a minimum fixed period of time e.g. 90 days
D. Only large banks offer them
A. No, not without a check drawn against the account by the account holder
B. Yes, but only to government entities
C. Yes, if someone presents a written note in good faith to pay them
D. Yes, because banking is fairly unregulated
A. They can only have one or the other facility
B. Open both a savings and a checking account with the same bank
C. Open a savings account with one bank, and a checking account with another
D. Not use a bank at all
A. The banking hours of your local bank
B. The period of time it takes a check to be cleared
C. A limit on how long a check is good for before it becomes invalid
D. The time period or the amount represented by checks that have been deposited but not cleared
A. Deposit multiplier
B. Deposit schedule
C. Reserve ratio
D. Reserve/Deposit ratio
A. Cashing in a bond coupon
B. Receiving interest on a loan
C. Opening a secondary bank account
D. Paying off a mortgage loan in full
A. Savings accounts are only at banks, cd's are only at credit unions
B. Savings accounts can be added to or withdrawn from at any time, CDs can not be
C. Savings accounts are for anyone, cd's are only for rich people
D. Savings accounts are required by anyone having a checking account, CDs are not
A. Writing the check
B. Indorsing the check
C. Cashing the check
D. Monopolizing the check
A. Credit policy
B. Monetary policy
C. Credit rating
D. Federal reserve system
A. Because nobody has to sign it
B. Because it is always only for services, not goods
C. Because there is no date written on it
D. Because it does not include the typical requirements of a contract such as offer, acceptance and consideration
A. A long term loan at prime market rate
B. A loan for the purchase of securities
C. A short term loan at an adjustable rate
D. A long term loan to a company, usually at a fixed rate of interest and for a specific term
A. By sending potentially risky customers to other banks
B. By finding ways to exploit the rich customers to subsidize the poor ones
C. By having a variety of account types and fee structures offering something to everyone
D. By being exclusive and catering only to high net worth individuals
A. Minimum number of customers
B. Minimum number of employees
C. Minimum salaries
D. Minimum capital
A. Debit cards
B. Facility to write checks
C. Unnamed accounts
D. Wire transfer ability
A. Banking institutions executing transactions with companies
B. Banking institutions executing transactions with foreign countries
C. Banking institutions executing transactions with consumers
D. Banking institutions executing transactions with other banks
A. A savings account
B. A checking account
C. A certificate of deposit
D. A check
A. Lower cost structure allows them to pay higher interest rates
B. They give away all of their earnings to their clients
C. They steal money from other clients to pay higher interest
D. Their laws require them to pay higher rates
A. SEC
B. FDIC
C. IRS
D. GAAP
A. Merely signing a check
B. Indorsing a check with terminology limiting how the funds can be applied
C. Writing a check out to a specific person
D. Presenting a check to a bank
A. An unconditional order, a specific amount, being payable to a specific person, being payable on a specific date
B. Being payable to a specific person, being payable on a specific date, that both parties belong to the same bank, being payable in US currency
C. A specific amount, being payable to a specific person, only in U.S. funds, for a specific good or service
D. An unconditional order, being payable to a group of people, being payable on any given day in a 30 day time frame and for a specific amount
A. Only rich people are allowed to have money market accounts
B. Money market accounts are offered only by national banks, not by local banks
C. Money market accounts always require some monthly fee, savings accounts do not
D. A money market account earns a higher interest rate and typically has a limit on the number of transactions each month
A. A checking account
B. Money market funds
C. A savings account
D. IRA
A. An extra payment made during a month on a bank loan
B. An extra interest payment made by the bank to customers
C. A late payment on a loan
D. Any payment made to an insured party for which an insurance company had no formal liability
A. Default
B. Collateral
C. Indemnity
D. Back pay
A. A savings account
B. A checking account
C. A money market account
D. A stock account
A. $500,000: $500,000 from one bank and nothing from the other
B. $500,000: $250,000 from each bank
C. $250,000 in total regardless of the number of banks
D. $250,000 in total as the smaller deposit is the only one covered
A. Mail cash
B. Wire transfer
C. Fly to the offshore country and withdraw it in person
D. Go to the local branch of the offshore bank
A. Checking accounts
B. Joint savings accounts
C. IRA
D. U.S. Government investments such as treasury bills
A. $50,000
B. $100,000
C. $250,000
D. $1,000,000
A. A bank located in a different state
B. A virtual bank with no physical location
C. A bank which only offers checking and no other services
D. A bank located outside the country of the depositor, usually in a lower tax jurisdiction
A. To replace the FDIC
B. To merge the two earlier funds namely the Bank Insurance Fund and the Savings Associations Insurance Fund
C. To reduce consumer taxes on investment gains
D. To promote the idea that consumers should be saving money
A. The government allows only one new bank per year
B. There is a limit on the number of banks allowed to be opened
C. There is a freeze on opening new banks
D. It is a regulated industry and a license is required before opening a new bank
A. By selling memberships
B. Through ad revenue from their site
C. By paying lower interest on deposits and charging higher interest on advances
D. By charging fees on accounts
A. Bringing in new customers to a bank
B. Paying interest on an outstanding loan
C. Combining an individual's bank accounts into one
D. The offsetting with a counterparty or counterparties of financial obligations or payments one owes with those one is entitled to receive
A. Taking out a loan
B. The reduction of debt by regular principal payments
C. Payment of interest on a loan
D. Buying negotiable instruments
A. $50,000
B. $100,000
C. $250,000
D. $1,000,000
A. Credit check
B. Credit rating
C. Underwriting
D. Reconciliation
A. A clearinghouse for checks
B. An organization formed for the purpose of holding deposits for individuals
C. A method of systematically saving money
D. Writing checks for an amount and cashing them for a different amount
A. No interest is earned on the account
B. Difficult to set up
C. It is often associated with organized crime
D. It helps the economy in foreign nations
A. The same as a promissory note
B. A written order by the Drawer to the Drawee to pay money to the Payee
C. A loan agreement for property
D. A verbal payment agreement
A. They have started offering fewer services
B. They have started interacting more with customers by requiring people to come into the bank
C. Banks have started providing investment and insurance services also to offer customers one stop shopping
D. They have started charging higher interest rates
A. The same as a check
B. The same as a draft
C. A written promise by the maker to pay money to the payee.
D. A loan agreement for property
A. As a moral penalty
B. To create a disparity between the rich and the poor
C. Due to risk based pricing policy i.e. charging a higher rate from customers more likely to default
D. To dissuade poor credit customers from banking
A. The offshore bank will contact the U.S. government and inform them of what the customers are doing
B. The U.S. tax law requires all citizens to pay taxes on both domestic and foreign earnings
C. The offshore bank will collect taxes on behalf of the U.S. government None of the above
A. The payee can negotiate what amount is actually deposited into their accounts; it does not have to be the amount stated
B. A special type of contract for the payment of money capable of transfer by negotiation
C. A contract for land
D. A music instrument purchased through a draft
A. $0
B. $300,000
C. $250,000
D. $50,000
A. $250,000
B. $750,000
C. $0
D. $50,000
A. Signing a check
B. Not signing a check
C. Handing someone a check in their name
D. Writing "for deposit only" on the back of a check
A. The wire system used worldwide to clear wire transfers
B. A central collection point where banks within a specified geographical area exchange checks with one another
C. A place where the interest rate is determined
D. None of the above
A. 1801
B. 1933
C. 2008
D. 1997