Checking all bank account papers to make sure that the bank records and your records agree is known as:
Credit check 0%
Credit rating 0%
Underwriting 0%
Reconciliation 0%
How do banks offer services to all levels and types of individuals and still earn money?
By sending potentially risky customers to other banks 0%
By finding ways to exploit the rich customers to subsidize the poor ones 0%
By having a variety of account types and fee structures offering something to everyone 0%
By being exclusive and catering only to high net worth individuals 0%
How does a bank make money by providing currency exchange services to its customers?
By charging the customers a slightly higher exchange rate than the rate it pays 0%
By cheating the customers on the exchange rate 0%
By forcing them to deposit the money in their bank 0%
By asking the customers to introduce five friends to the bank as customers 0%
How have banks changed in recent years to respond to customer needs and wants?
They have started offering fewer services 0%
They have started interacting more with customers by requiring people to come into the bank 0%
Banks have started providing investment and insurance services also to offer customers one stop shopping 0%
They have started charging higher interest rates 0%
How is a money market account different from a savings account?
Only rich people are allowed to have money market accounts 0%
Money market accounts are offered only by national banks, not by local banks 0%
Money market accounts always require some monthly fee, savings accounts do not 0%
A money market account earns a higher interest rate and typically has a limit on the number of transactions each month 0%
How is a savings account different from a certificate of deposit?
Savings accounts are only at banks, cd's are only at credit unions 0%
Savings accounts can be added to or withdrawn from at any time, CDs can not be 0%
Savings accounts are for anyone, cd's are only for rich people 0%
Savings accounts are required by anyone having a checking account, CDs are not 0%
What amount would a customer be covered for by the FDIC if he/she had $250,000 in savings at Bank XYZ, and also $50,000 in a retirement account with the same bank?
$0 0%
$300,000 0%
$250,000 0%
$50,000 0%
What amount would a customer be insured for if they made deposits to their accounts at three different locations of their bank?
$250,000 0%
$750,000 0%
$0 0%
$50,000 0%
What amount would someone who has $500,000 in one bank and $250,000 in another bank be insured for in total?
$500,000: $500,000 from one bank and nothing from the other 0%
$500,000: $250,000 from each bank 0%
$250,000 in total regardless of the number of banks 0%
$250,000 in total as the smaller deposit is the only one covered 0%
What are the four requirements for a promissory note to be legal?
An unconditional order, a specific amount, being payable to a specific person, being payable on a specific date 0%
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 0%
A specific amount, being payable to a specific person, only in U.S. funds, for a specific good or service 0%
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 0%
What can the FDIC do to a member bank if the bank fails to comply with the set standards?
Send a letter to the Congress 0%
Stop insuring that bank's customers 0%
Declare the bank insolvent and take over its management 0%
Close down the bank 0%
What does FDIC stand for?
Financial Deposit Insurance Company 0%
Federal Draft Insurance Company 0%
Financial Draft Insurance Corporation 0%
Federal Deposit Insurance Corporation 0%
What does MMDA stand for?
Massive money draft account 0%
Money making draft account 0%
Monopoly market deposit account 0%
Money market deposit account 0%
What does the term "Availability Float" imply?
The banking hours of your local bank 0%
The period of time it takes a check to be cleared 0%
A limit on how long a check is good for before it becomes invalid 0%
The time period or the amount represented by checks that have been deposited but not cleared 0%
What does the term "Debenture" imply?
A long term loan at prime market rate 0%
A loan for the purchase of securities 0%
A short term loan at an adjustable rate 0%
A long term loan to a company, usually at a fixed rate of interest and for a specific term 0%
What does the term "Ex Gratia Payment" mean?
An extra payment made during a month on a bank loan 0%
An extra interest payment made by the bank to customers 0%
A late payment on a loan 0%
Any payment made to an insured party for which an insurance company had no formal liability 0%
What does the term "Netting" mean?
Bringing in new customers to a bank 0%
Paying interest on an outstanding loan 0%
Combining an individual's bank accounts into one 0%
The offsetting with a counterparty or counterparties of financial obligations or payments one owes with those one is entitled to receive 0%
What does the term "Nostro Account" imply?
It is another term for an Escrow Account 0%
It is a banking term to describe an account a bank holds with a bank in a foreign country, usually in the currency of that country 0%
It is an account with a bank from which any part of the balance may be withdrawn on demand 0%
It is an account with two or more authorized signatories 0%
What does the term "Straight Paper" denote?
It is another name for a bond 0%
It is another term for cash 0%
It is a method used for depositing checks 0%
It stands for unsecured notes, bills of exchange and/or banker's acceptances 0%
What is "Demand Deposit" account another name for?
A Treasury Bill 0%
A Checking Account 0%
A Certificate of Deposit 0%
A Mortgage 0%
What is "Negotiable Order of Withdrawal Account" i.e. NOW Account, another name for?
A mortgage loan 0%
A checking account with no fees 0%
A checking account that earns interest 0%
A savings account 0%
What is a "bill of exchange"?
The same as a promissory note 0%
A written order by the Drawer to the Drawee to pay money to the Payee 0%
A loan agreement for property 0%
A verbal payment agreement 0%
What is a "promissory note"?
The same as a check 0%
The same as a draft 0%
A written promise by the maker to pay money to the payee. 0%
A loan agreement for property 0%
What is a bank branch?
The entire company of a bank including all locations 0%
An investment tool 0%
A physical location of a bank, or one of the several locations of larger banks 0%
The internet site of a bank 0%
What is a holder in due course?
The payee of a negotiable instrument 0%
The drawee of a negotiable instrument 0%
An innocent party who purchases a negotiable instrument without any defect in the instrument or any notice of dishonor. 0%
The writer of a check 0%
What is a negotiable instrument drawn against deposited funds to pay a specified amount of money to a specific person on demand called?
A mandate 0%
A checking Account 0%
A loan request 0%
A promissory note 0%
What is a secondary way through which banks earn money?
By selling memberships 0%
Through ad revenue from their site 0%
By paying lower interest on deposits and charging higher interest on advances 0%
By charging fees on accounts 0%
What is a typical retail banking service?
Selling merchandise 0%
Offering consumers checking accounts 0%
Establishing web interfaces for customers 0%
Selling real estate 0%
What is an example of 'restrictive endorsement'?
Signing a check 0%
Not signing a check 0%
Handing someone a check in their name 0%
Writing "for deposit only" on the back of a check 0%
What is another name for a bill of exchange?
A savings account 0%
A checking account 0%
A certificate of deposit 0%
A check 0%
What is meant by "online banking"?
Using the internet to log in to and interact with your bank account 0%
Going to the bank and talking to the teller 0%
Using the ATM machine 0%
Mailing checks to the bank for deposit 0%
What is meant by "restrictive endorsement"?
Merely signing a check 0%
Indorsing a check with terminology limiting how the funds can be applied 0%
Writing a check out to a specific person 0%
Presenting a check to a bank 0%
What is meant by the term "Amortization"?
Taking out a loan 0%
The reduction of debt by regular principal payments 0%
Payment of interest on a loan 0%
Buying negotiable instruments 0%
What is meant by the term "Clearing House"?
The wire system used worldwide to clear wire transfers 0%
A central collection point where banks within a specified geographical area exchange checks with one another 0%
A place where the interest rate is determined 0%
None of the above 0%
What is meant by the term "Discrete Compounding"?
Paying interest on loans made to other banks 0%
The process of calculating interest and adding it to the existing principal and interest at the end of finite time intervals such as a day, a month or a year 0%
Compounding interest only on high interest loans 0%
The difference between the cost of money and the rate received on it 0%
What is meant by the term "Redemption"?
Cashing in a bond coupon 0%
Receiving interest on a loan 0%
Opening a secondary bank account 0%
Paying off a mortgage loan in full 0%
What is meant by the term "risk based pricing"?
Charging a higher rate from customers more likely to default 0%
Pricing the online services of a bank high 0%
Charging a higher rate from high net worth customers to capitalize on their wealth 0%
Charging higher bank fees from customers based on their income 0%
What is meant by the term "Thrift"?
A clearinghouse for checks 0%
An organization formed for the purpose of holding deposits for individuals 0%
A method of systematically saving money 0%
Writing checks for an amount and cashing them for a different amount 0%
What is meant by the term Retail Banking?
Banking institutions executing transactions with companies 0%
Banking institutions executing transactions with foreign countries 0%
Banking institutions executing transactions with consumers 0%
Banking institutions executing transactions with other banks 0%
What is one criticism of offshore banking?
No interest is earned on the account 0%
Difficult to set up 0%
It is often associated with organized crime 0%
It helps the economy in foreign nations 0%
What is the current maximum limit that the FDIC will insure any one person at a bank for?
$50,000 0%
$100,000 0%
$250,000 0%
$1,000,000 0%
What is the definition of a negotiable instrument?
The payee can negotiate what amount is actually deposited into their accounts; it does not have to be the amount stated 0%
A special type of contract for the payment of money capable of transfer by negotiation 0%
A contract for land 0%
A music instrument purchased through a draft 0%
What is the definition of an offshore bank?
A bank located in a different state 0%
A virtual bank with no physical location 0%
A bank which only offers checking and no other services 0%
A bank located outside the country of the depositor, usually in a lower tax jurisdiction 0%
What is the government entity that insures bank balances?
SEC 0%
FDIC 0%
IRS 0%
GAAP 0%
What is the payment that people receive after a mishap which leaves them in the same financial position as they were in before they suffered the loss called?
Default 0%
Collateral 0%
Indemnity 0%
Back pay 0%
What is the primary function of a bank?
To act as a payment agent for its customers, and to borrow and lend money 0%
To help people buy cars 0%
To hide money from the IRS 0%
To allow the rich to get richer 0%
What is the primary way a bank earns money?
By selling memberships 0%
Through ad revenue from their site 0%
By paying lower interest on deposits and charging higher interest on advances 0%
By charging fees on accounts 0%
What is the process which the Federal Reserve uses to influence the availability and cost of money and credit called?
Credit policy 0%
Monetary policy 0%
Credit rating 0%
Federal reserve system 0%
What is the purpose of the FDIC?
It provides deposit insurance guaranteeing the safety of retail banking customers' money 0%
It acts as a clearing house for all checks 0%
It provides loans to banks 0%
It provides loans to consumers 0%
What is the ratio of bank reserves to bank deposits called?
Deposit multiplier 0%
Deposit schedule 0%
Reserve ratio 0%
Reserve/Deposit ratio 0%
What is the signing of a check on its back by the payee referred to as?
Writing the check 0%
Indorsing the check 0%
Cashing the check 0%
Monopolizing the check 0%
What is the situation in which many customers try to withdraw their bank deposits simultaneously, but the bank's reserves are not sufficient to cover the withdrawals called?
Run 0%
Overdraft 0%
Panic 0%
Bankruptcy 0%
What is the term which describes illegally benefiting from float e. g. by depositing and drawing checks between accounts at two or more banks?
Floating 0%
Rejecting 0%
Kiting 0%
Stocking 0%
What level will the FDIC insure any one person at a bank for beginning January 1, 2010?
$50,000 0%
$100,000 0%
$250,000 0%
$1,000,000 0%
What method would a consumer most likely use to move funds between their offshore account and their domestic account?
Mail cash 0%
Wire transfer 0%
Fly to the offshore country and withdraw it in person 0%
Go to the local branch of the offshore bank 0%
What type of account would someone put their money into if they wanted to earn a high rate of return and not to have access to their money for a fixed period e.g. 90 days?
A certificate of deposit 0%
A checking account 0%
A savings account 0%
A stock account 0%
What type of account would someone who wants the facility to pay people through checks open?
A savings account 0%
A checking account 0%
A money market account 0%
A stock account 0%
What type of account would someone who wants to earn a high rate of interest and does not intend to have many transactions open?
A checking account 0%
A savings Account 0%
A mortgage loan 0%
A money market account 0%
What was the purpose of the 2006 Deposit Insurance Fund?
To replace the FDIC 0%
To merge the two earlier funds namely the Bank Insurance Fund and the Savings Associations Insurance Fund 0%
To reduce consumer taxes on investment gains 0%
To promote the idea that consumers should be saving money 0%
What would a person do if they wanted to have the facility to save money as well as issue checks?
They can only have one or the other facility 0%
Open both a savings and a checking account with the same bank 0%
Open a savings account with one bank, and a checking account with another 0%
Not use a bank at all 0%
What would happen if Mr. X made a check out to Mr. Y for $100, who indorsed the check, and then sold it for $50 to Mr. Z? Would Mr. Z be able to cash the check?
Yes, but only for $50, not the face value of $100 0%
Yes, for the amount of $100 0%
No, Mr. Z can not cash it since it was sold to him for less than the face value 0%
No, since it was not issued to him 0%
When was the FDIC established?
1801 0%
1933 0%
2008 0%
1997 0%
Which of the following is a benefit of an offshore bank account?
Ability to walk into a local branch of the bank 0%
Low taxation on the transactions related to the offshore account 0%
Debit cards 0%
Customer service 0%
Which of the following is a characteristic of a certificate of deposit?
You have to earn at least $100,000 in salary to be allowed to buy a CD 0%
It is just a different name for a savings account 0%
It requires that the funds be kept in the account for a minimum fixed period of time e.g. 90 days 0%
Only large banks offer them 0%
Which of the following is a feature often found in an offshore bank account, not usually found in an onshore bank account?
Debit cards 0%
Facility to write checks 0%
Unnamed accounts 0%
Wire transfer ability 0%
Which of the following is a reason for a person to open an offshore account?
They are pressured into it by their family 0%
They are required to by law 0%
They want the ability to move their money out of their home country banking system, especially during times of economic turbulence 0%
They think the onshore banking industry is about to collapse 0%
Which of the following is a requirement that a bank has to comply with?
Minimum number of customers 0%
Minimum number of employees 0%
Minimum salaries 0%
Minimum capital 0%
Which of the following is a risk with having money in a bank?
The bank might close down 0%
There is no insurance mechanism in place on banks 0%
The US dollar might crash 0%
There is a run on the banks during turbulent economic times, due to which banks may be unable to give customers all of their money on demand 0%
Which of the following is not covered by the FDIC?
A checking account 0%
Money market funds 0%
A savings account 0%
IRA 0%
Which of the following would not be covered by the FDIC?
Checking accounts 0%
Joint savings accounts 0%
IRA 0%
U.S. Government investments such as treasury bills 0%
Why are offshore banks often able to offer a client higher interest rates?
Lower cost structure allows them to pay higher interest rates 0%
They give away all of their earnings to their clients 0%
They steal money from other clients to pay higher interest 0%
Their laws require them to pay higher rates 0%
Why can't anyone start a new bank?
The government allows only one new bank per year 0%
There is a limit on the number of banks allowed to be opened 0%
There is a freeze on opening new banks 0%
It is a regulated industry and a license is required before opening a new bank 0%
Why do banks charge higher interest rates from customers with poorer credit?
As a moral penalty 0%
To create a disparity between the rich and the poor 0%
Due to risk based pricing policy i.e. charging a higher rate from customers more likely to default 0%
To dissuade poor credit customers from banking 0%
Why do banks offer debit cards and off-site ATM machines?
To encourage people to shop and go into debt 0%
For the convenience of their customers in order to build brand loyalty 0%
Because it is required by law 0%
Because everyone else does it 0%
Why do offshore banks not save someone from paying taxes on the money in the account?
The offshore bank will contact the U.S. government and inform them of what the customers are doing 0%
The U.S. tax law requires all citizens to pay taxes on both domestic and foreign earnings 0%
The offshore bank will collect taxes on behalf of the U.S. government 0%
None of the above 0%
Why do the words Debit and Credit have meanings on a bank statement different from the ones which they have in normal accounting ( i. e. a debit is actually a withdrawal, a credit a deposit)?
The bank statement is created from the bank's perspective, not the customer's 0%
The bank industry has different rules from those of the GAAP 0%
It has been a tradition since the 1800s 0%
None of the above 0%
Why is a negotiable instrument a "special contract"?
Because nobody has to sign it 0%
Because it is always only for services, not goods 0%
Because there is no date written on it 0%
Because it does not include the typical requirements of a contract such as offer, acceptance and consideration 0%
Why was the FDIC created?
To manage consumer loans 0%
To provide a clearing house for consumer loans 0%
To provide a clearing house for consumer checks and drafts 0%
To give consumers the confidence that their money in the bank would remain safe even if the bank failed. 0%
Why was the FDIC limit of insurance raised to $250,000 temporarily in 2008 thru 2009?
The failure of several banks created a need to bolster consumer confidence in the industry 0%
To help consumers reduce their tax liabilities 0%
To help stimulate the economy 0%
To provide loans to consumers for housing 0%
Would a bank be allowed to pay someone from a personal account without a mandate from the customer?
No, not without a check drawn against the account by the account holder 0%
Yes, but only to government entities 0%
Yes, if someone presents a written note in good faith to pay them 0%
Yes, because banking is fairly unregulated 0%