Bank Exam Reading Comprehension
Q. What does 'credit score' indicate?
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A.
The amount of money in a bank account
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B.
The likelihood of repaying loans
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C.
The interest rate on loans
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D.
The total debt of an individual
Solution
A credit score indicates the likelihood of repaying loans.
Correct Answer: B — The likelihood of repaying loans
Q. What does 'FDIC' stand for?
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A.
Federal Deposit Insurance Corporation
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B.
Financial Development Investment Company
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C.
Federal Debt Insurance Company
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D.
Financial Deposit Insurance Corporation
Solution
'FDIC' stands for Federal Deposit Insurance Corporation.
Correct Answer: A — Federal Deposit Insurance Corporation
Q. What does 'overdraft' mean?
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A.
A type of loan
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B.
Exceeding the available balance in an account
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C.
A bank fee
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D.
A savings plan
Solution
Overdraft means exceeding the available balance in an account.
Correct Answer: B — Exceeding the available balance in an account
Q. What does the term 'interest rate' refer to?
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A.
The fee charged for account maintenance
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B.
The percentage charged on loans or paid on deposits
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C.
The cost of bank services
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D.
The amount of money in a savings account
Solution
Interest rate refers to the percentage charged on loans or paid on deposits.
Correct Answer: B — The percentage charged on loans or paid on deposits
Q. What is a 'credit score'?
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A.
A measure of a person's creditworthiness
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B.
The amount of money in a bank account
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C.
The interest rate on loans
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D.
A type of bank account
Solution
A 'credit score' is a measure of a person's creditworthiness.
Correct Answer: A — A measure of a person's creditworthiness
Q. What is a 'fixed deposit'?
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A.
A type of checking account
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B.
A savings account with a fixed interest rate
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C.
A loan with fixed payments
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D.
An investment in stocks
Solution
A fixed deposit is a savings account with a fixed interest rate.
Correct Answer: B — A savings account with a fixed interest rate
Q. What is a 'savings account' primarily used for?
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A.
Daily transactions
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B.
Long-term investments
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C.
Storing money for future use
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D.
Paying bills
Solution
A savings account is primarily used for storing money for future use.
Correct Answer: C — Storing money for future use
Q. What is the main function of an ATM?
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A.
To provide loans
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B.
To allow cash withdrawals and deposits
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C.
To open new accounts
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D.
To offer investment advice
Solution
The main function of an ATM is to allow cash withdrawals and deposits.
Correct Answer: B — To allow cash withdrawals and deposits
Q. What is the primary purpose of a bank?
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A.
To provide loans to individuals
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B.
To facilitate transactions and manage deposits
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C.
To invest in stocks
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D.
To offer insurance services
Solution
The primary purpose of a bank is to facilitate transactions and manage deposits.
Correct Answer: B — To facilitate transactions and manage deposits
Q. What is the purpose of a bank statement?
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A.
To summarize account activity
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B.
To provide loan options
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C.
To advertise bank services
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D.
To calculate interest rates
Solution
The purpose of a bank statement is to summarize account activity.
Correct Answer: A — To summarize account activity
Q. What is the role of a bank teller?
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A.
To approve loans
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B.
To manage investments
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C.
To assist customers with transactions
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D.
To conduct audits
Solution
The role of a bank teller is to assist customers with transactions.
Correct Answer: C — To assist customers with transactions
Q. Which document is typically required to open a bank account?
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A.
Birth certificate
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B.
Social security card
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C.
Proof of address
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D.
All of the above
Solution
All of the above documents are typically required to open a bank account.
Correct Answer: D — All of the above
Q. Which of the following is a benefit of online banking?
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A.
Limited access to funds
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B.
Convenience of managing accounts anytime
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C.
Higher fees
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D.
In-person customer service
Solution
The convenience of managing accounts anytime is a key benefit of online banking.
Correct Answer: B — Convenience of managing accounts anytime
Q. Which of the following is NOT a type of bank?
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A.
Commercial Bank
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B.
Investment Bank
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C.
Central Bank
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D.
Retail Bank
Solution
Retail Bank is a type of bank; the correct answer is that all listed are types of banks.
Correct Answer: D — Retail Bank
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