Q. What is the main purpose of a development bank?
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A.
To provide short-term loans
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B.
To promote economic development in specific sectors
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C.
To manage personal savings
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D.
To facilitate international trade
Solution
Development banks aim to promote economic development in specific sectors by providing long-term financing.
Correct Answer:
B
— To promote economic development in specific sectors
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Q. What type of financial instrument is a certificate of deposit (CD)?
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A.
Equity security
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B.
Debt security
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C.
Derivative
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D.
Currency
Solution
A certificate of deposit (CD) is a debt security issued by banks to raise funds from depositors.
Correct Answer:
B
— Debt security
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Q. Which of the following is NOT a function of the central bank?
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A.
Issuing currency
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B.
Controlling inflation
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C.
Providing personal loans
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D.
Regulating the banking system
Solution
Providing personal loans is not a function of the central bank; it focuses on monetary policy and banking regulation.
Correct Answer:
C
— Providing personal loans
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Q. Which type of bank is primarily involved in underwriting and issuing securities?
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A.
Commercial Bank
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B.
Investment Bank
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C.
Cooperative Bank
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D.
Microfinance Bank
Solution
Investment banks are primarily involved in underwriting and issuing securities.
Correct Answer:
B
— Investment Bank
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Q. Which type of bank primarily serves the needs of low-income individuals and small businesses?
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A.
Commercial Bank
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B.
Investment Bank
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C.
Microfinance Bank
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D.
Central Bank
Solution
Microfinance banks primarily serve the needs of low-income individuals and small businesses by providing small loans.
Correct Answer:
C
— Microfinance Bank
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