a. reduce the cost of financial transactions.
b. provide handling of payments but usually less efficiently than other firms.
c. increase the cost of financial transactions but offset these higher costs by providing
safekeeping of customer funds.
d. provide safety of resources, but only for the large borrowing customers who can afford it.
24. If a bank has 1,000 depositors, each of whom deposits $1,000 in the bank, and the bank
makes loans of $10,000 each, then each depositor has contributed:
a. $100 to each loan.
b. $1 to each loan.
c. $10 to each loan.
d. $1000 to each loan
16. If a bank has 1,000 depositors, each of whom deposits $1,000 in the bank, and the bank
makes loans of $10,000 each, then each depositor has contributed:
a. $10 to each loan.
b. $1 to each loan.
c. $100 to each loan.
d. $1000 to each loan.
17. The money that a person borrows from a bank or other financial institutions is called a:
A. Loan
B. Commercial
C. Interest
D. Mortgage
18. 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:
A. Deposit
B. Loan
C. Mortgage
D. Interest
19. When a person publicly announces they cannot repay their loans it is called:
A. Bankruptcy
B. Deposit
C. Mortgage
D. Interest
20. In financial transactions, a CD is a:
A. Certificate of Deposit
B. Certificate of Debt
C. Citizen's Deposit
D. Certificate of Collateral
21. Which of the following is not a type of financial market?
A. Gold market
B. Insurance market
C. Capital market
D. Money market
22. Securities are ________ for the person who buys them, but ________ for the individual/firm
that sells them.
A) assets; liabilities
B) liabilities; assets
C) income; liabilities
D) liabilities; expenses
23. Financial markets have the basic function of :
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