Banking Theory - Quiz 2

Banking Theory - Quiz 2

1. A Bank is defined as________ .

An institution that lends money to others
An institution that accepts deposits from others
An institution that accepts deposits from the public and lends money to others.
None of the above


2. The process where a bank transfer its credit to its customer when it advances loans to its customers and transfer to itself when these advances are returned to it as deposits is know as________ .

Bank creation
Credit multiplication
Deposit creation
credit creation


3. A typical commercial bank provides__________.

Long term loans
Medium term loans
Short term loans
All the above


4. A typical industrial bank provides___________ .

Long term loans
Medium term loans
short term loans
All the above


5. Banks that specialize in providing short term agriculture credit are known as_________ .

Land mortgage banks
Agricultural cooperative banks
Commercial banks
Industrial banks


6. Foreign exchange banks specialize in providing__________.

Long term loans
Medium term loans
Short term loans
All the above


7. Under the branch banking system__________ .

small number of big banks with branches exists all over the country
Large number of big banks exists all over the country
Large number of small banks exists all over the country
all individual bank undertakes business either through single office or through a few branches


8. Which of the following systems of banking contributes to ‘BANKING MONOPOLY’?

Unit banking system
Chain banking system
Group banking system
Branch banking system


9. System of banking that is owned and controlled by one person or a group of persons is known as :

Group banking system
Chain banking system
pure banking system
Branch banking system


10. System of banking where two or more banks are directly or indirectly controlled by an Association or trust of a corporation is known as _______.

Group banking system
Chain banking system
pure banking system
Branch banking system

Compiled by Ms.A.Lavanya