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- Question
Compounding interest means interest accrues
Options- A. at variable rates throughout the term
- B. more quickly than simple interest
- C. more slowly than simple interest
- D. at the same rate as simple interest
- Correct Answer
- more quickly than simple interest
- 1. In a fractional reserve banking system
Options- A. bank accepts deposits
- B. bank accepts some loans
- C. bank has some cash reserves
- D. All the above Discuss
- 2. The reserves of a commercial bank consist of
Options- A. the bank's net worth
- B. the amount of money market funds it holds
- C. government securities that the bank holds
- D. deposits at the Federal Reserve Bank and vault cash Discuss
- 3. What is true about certificates of deposit?
Options- A. the money has to remain in the account for a specified period of time
- B. they are the most liquid account available
- C. they offer lower interest rates than savings accounts
- D. All the above Discuss
- 4. Reconciling the bank statement monthly is an example of
Options- A. establishment of responsibility
- B. independent internal verification
- C. documentation procedures
- D. segregation of duties Discuss
- 5. How can investors receive compounding returns?
Options- A. By investing their earnings back into their original investment
- B. By diversifying their investment portfolio
- C. By selecting a savings account that has a higher interest rate
- D. By transferring their earnings back into high-risk investment Discuss
- 6. Which investment type typically carries the least risk?
Options- A. Mutual funds
- B. Treasury bonds
- C. Savings account
- D. Individual stocks Discuss
- 7. The credit balance in the bank account is
Options- A. amount liable to pay by bank
- B. amount liable to pay by customer
- C. Both A + B
- D. None of the above Discuss
- 8. Most financial investments are examples of what type of risk?
Options- A. Credit risk
- B. Longevity risk
- C. Human risk
- D. Inflation risk Discuss
- 9. The interest-rate effect suggests that
Options- A. an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.
- B. a decrease in the supply of money will increase interest rates and reduce interest-sensitive consumption and investment spending
- C. an increase in the price level will decrease the demand for money, reduce interest rates, and increase consumption and investment spending.
- D. an increase in the price level will increase the demand for money, reduce interest rates, and decrease consumption and investment spending. Discuss
- 10. An increase in the price of product A will
Options- A. reduce the demand for resources used in the production of A.
- B. reduce the demand for substitute product B
- C. increase the demand for complementary product C.
- D. increase the demand for substitute product B. Discuss
Accounting and Finance problems
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Correct Answer: All the above
Explanation:
Fractional reserve banking is the practice whereby a bank accepts deposits, makes loans or investments, but is required to hold reserves equal to only a fraction of its deposit liabilities. Fractional reserve banking is a banking system in which only a fraction of bank deposits are backed by actual cash on hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties.
Correct Answer: deposits at the Federal Reserve Bank and vault cash
Correct Answer: the money has to remain in the account for a specified period of time
Explanation:
A certificate of deposit (CD) is a savings certificate with a fixed maturity date, specified fixed interest rate and can be issued in any denomination aside from minimum investment requirements.
CD's are generally issued by commercial banks
Correct Answer: independent internal verification
Explanation:
Reconciling the bank statement monthly is an example of independent internal verification
Correct Answer: By investing their earnings back into their original investment
Correct Answer: Savings account
Explanation:
Different types of risk exist in ivesting schemes depending on what you've invested in.
Savings accounts are generally regarded as the least risky investments as in this we just save our wealth for future expenses.
Correct Answer: amount liable to pay by bank
Explanation:
Bank credit balance meant that the banker is laible to paid us.
And if we have a credit balance accouding to bank statement is mean we have " cash at bank" and in our book we show in the assets side but bank show laiblities side.
Hence, The credit balance in the bank account is the amiunt we have in our account and we are eligible to withdraw that.
Correct Answer: Human risk
Explanation:
Most financial investments are examples of Human risk type of risks. Since, we humans invest in any kind of financial investments on our own risk expecting profits.
Correct Answer: an increase in the price level will increase the demand for money, increase interest rates, and decrease consumption and investment spending.
Correct Answer: increase the demand for substitute product B.
Explanation:
If the price of a product rises, the demand for the substitute product increases.
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