TECEP Financial Institutions & Markets: Practice & Test Prep  /  Business Courses

Test Prep Plan - Take a practice test

Take this practice test to check your existing knowledge of the course material. We'll review your answers and create a Test Prep Plan for you based on your results.
How Test Prep Plans work
1
Answer 50 questions
Test your existing knowledge.
2
View your test results
Based on your results, we'll create a customized Test Prep Plan just for you!
3
Study smarter
Study more effectively: skip concepts you already know and focus on what you still need to learn.

The Flow of Funds in Financial Intermediaries Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Because banks deal in loans or savings that might have adjustable rates that are dependent on the prime rate or T-bill rate, _____.

Question 2 2. Which of the following is an example of a consumer loan?

Question 3 3. Which of the following are types of bank assets?

Question 4 4. Which of the following statements is true regarding the money supply?

Question 5 5. In economics, the word 'liquid' refers to which of the following?

Page 2

Question 6 6. Which of the following measures of the money supply is largest?

Question 7 7. Which of the following statements is FALSE regarding the discount rate?

Question 8 8. Which of the following accurately describes the discount rate?

Question 9 9. Why do banks choose to borrow directly from the Fed?

Question 10 10. Which of the following financial assets is a debt instrument - a promise by the issuer to pay the holder their principal plus interest at some future date?

Page 3

Question 11 11. What are the conditions for something to qualify as a financial asset?

Question 12 12. George reaches into his wallet and pulls out a $20 US bill to pay for his coffee. By using currency to make a purchase, what is George actually doing?

Question 13 13. Assets are reported on the ___________.

Question 14 14. Current assets are assets that _____________ within one year of the balance sheet date.

Question 15 15. __________ are assets that can physically be touched.

Page 4

Question 16 16. What kind of consumer buys products during adverse selection?

Question 17 17. A situation where one party knows information that the other party does not is called:

Question 18 18. Which is an example of adverse selection?

Question 19 19. When a deposit is made into a bank, what does the bank do?

Question 20 20. How does the economy change every time banks loan out excess reserves?

Page 5

Question 21 21. Lydia deposits $70,000 into the First National Bank of Ceelo. The required reserve ratio is 10%. How much will the money supply increase if the bank loans out excess reserves?

Question 22 22. 3. The bank may do some calculations such as debt to equity. This is known as:

Question 23 23. 2. The shareholders invest in stock for the company. This is known as:

Question 24 24. 1. Which credit process provides another source of paying back the loan in the event the business can't repay the loan?

Question 25 25. Which is the best explanation of a demand deposit?

Page 6

Question 26 26. What federal organization regulates a bank's reserve requirements and provides its own definition of a demand deposit account?

Question 27 27. Which of the following statements is true?

Question 28 28. Sue bought a car with a loan. She stopped paying the loan on the car and the bank took her boat. Why did this happen?

Question 29 29. How do borrowers qualify for an unsecured loan?

Question 30 30. What type of loan is made to a borrower to purchase a house?

The Flow of Funds in Financial Intermediaries Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Support