FIN Quiz 2

fickernuit's version from 2017-04-06 17:14

Section 1

Question Answer
Routine, day-to-day use of liquid assetsCash Management
largest single group of financial institutions. Main functions include accepting deposits, lending, and safekeepingUniversal banks
Cater to small savings and provide loans at longer, easier terms to lower income groupsThrift Banks
Originally founded for lower-income workers to save moneySavings Bank
May be owned by both shareholders and depositorsSavings and Loan Association
Organized by Private persons, residing in given community to accumulate fundsPrivate Development Bank
Bank owned by its membersCooperative Bank
Provides emergency loans for people who couldn't get loans from traditional lendersCredit Union
Performs fiduciary function; for beneficiary or heirTrust Company
Provides credit facilities to farmer, merchants and people of rural communitiesRural Bank
Bank formed under foreign lawsForeign Bank
Were established to finance development of agricultural sector / other specific needsSpecialized Government Banks
Established by islamic groupsIslamic Banks
alternative form of obtaining funds from the public, other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the borrower's own account, for the purpose of relending or purchasing of receivables and other obligations. Deposit Substitutes
financial instrument issued by and payable at a post office as an alternative to sending cash thru the postal system. Postal Money Order
Deposits are added together in the bank maintained in the same right and capacity for his benefit either in his own name or in the name of others.Deposit Insurance Coverage – Individual Account
money placed in a bank for safekeeping or to earn interest and to be used according to banking practice. Deposits are the lifeblood of a bankDeposits

Section 2

Question Answer
Spendable money by writing checks chargeable against checking accountChecking Account
Money can only be spent by withdrawing funds from the bank in the form of cash or by transferring funds to checking accountsSavings Account
are checks drawn by the bank against itself; guarantees payment to the receiver of the checkManager’s Check (or Cashier’s Check)
is a written order of a depositor to a bank to pay a specified amount, from a demand account, either to himself or to a third person.A Check
Checks are valid for 6 months onlyClearing Items
currencies and coins kept by banks. Cash items are for immediate credit to the account of the depositor (unlike checks which are subject for clearing) and withdrawable anytimeCash (or Cash Items)
payable only to the named payee or his endorsee; usually contains “Pay to the order of (name)” Order Check
payable to anyone who is in possession of the document; usually containing no payee or payable to either “Bearer” or “Cash”.Bearer Check
bank check given to customers who have run out of checks or whose checks are not yet available Counter Check
an annual rate that ignores compounding effects.Nominal rate (INOM)
amount of interest charged each period, e.g. monthly or quarterly.Periodic rate (IPER)
sum of the daily end-of-day balances in the account for the relevant time period for the deposit (varies for different products) divided by the number of days in that periodAverage Daily Balance (ADB)
Matures in less than a yearU.S. Treasury Bills
Funds remain on account for a given time periodCertificates of Deposit (CDs)
Demand DepositChecking Accounts
Time DepositSavings Account
Check drawn against bank, guarantee of paymentManager's Check
Automatic transfer from one checking account to another's savings accountAutomatic Transfer Agreement
Automatic transfer from one checking account to another's to pay billsAutomatic Bill Transfer
Minimum amount to open an accountTerm Deposit

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