2024 test knowledge 1-2 Flashcards
Where lenders and borrowers interact directly, it is known as:
a) intermediation placement.
b) indirect intermediation.
c) intermediation.
d) disintermediation.
d) disintermediation.
Which of the following is not one of the four elements of intermediation?
a) Maturity transformation.
b) Aggregation.
c) Risk transformation.
d) Equalisation.
d) Equalisation.
Which of the following is not a function of the Bank of England?
a)Maintaining economic stability.
b) Banker to the UK government.
c) Issuing bank notes.
d) Prudential regulation.
d) Prudential regulation.
The current benchmark for financial businesses and institutions to calculate the interest paid on swap transactions and sterling floating rate notes is the:
a) Bank of England base rate.
b) sterling overnight index average.
c) London interbank offered rate.
d) Monetary Policy Committee rate.
b) sterling overnight index average.
Finance houses raise most of their funds through:
a)retail markets.
b) wholesale markets.
c) customer deposits.
d) private equity markets.
b) wholesale markets.
The Workers Credit Union has reserves of £60,000, which equals 6% of its assets. This means it:
a) cannot pay dividends or interest to savers.
b) can only pay interest to savers
c) can only pay dividends to savers.
d) can pay dividends or interest to savers.
d) can pay dividends or interest to savers.
Which one of the following would not be an example of a mutual organisation?
a) Foresters Friendly Society.
b) National Fire Savers Credit Union.
c) Nationwide Building Society.
d) Barclays Bank.
d) Barclays Bank.
What is the maximum borrowing a building society can raise on the wholesale market?
a)25% of their assets.
b) 50% of their liabilities.
c) 60% of their liabilities.
d) 75% of their assets.
b) 50% of their liabilities.
Which organisation is responsible for managing new issues of UK gilts?
a) The London Stock Exchange.
b) The Bank of England.
c) The Debt Management Office.
d) The UK government.
c) The Debt Management Office.
In order to be acceptable as a medium of exchange, money must have certain properties. Which of the following is not one of the properties?
a) Sufficient quantity.
b) Divisible into smaller units.
c) Portability.
d) Available in high value denominations.
d) Available in high value denominations.
A recession is defined as:
a) two quarters of static GDP growth.
b) two quarters of negative GDP growth.
c) three quarters of rising inflation.
d) three quarters of negative GDP growth.
b) two quarters of negative GDP growth.
Allowing for the maximum permitted divergence, the Monetary Policy Committee inflation target is:
a) 1–2%.
b) 1–3%.
c) 2–3%.
d) 3–4%.
b) 1–3%.
The increase in the Consumer Prices Index has fallen from 4% to 2.5% in the past 12 months. This is an example of:
a) deflation.
b) stagflation.
c) disinflation.
d) negative inflation.
c) disinflation.
In normal circumstances, what is the maximum number of times the Bank of England base rate could change in a 12-month period?
a) 3.
b) 5.
c) 8.
d) 12.
c) 8.
Which of the following best describes EU Directives?
They:
a) must be implemented within 12 months of publication.
b) describe the required outcome but leave member states to decide how they are achieved.
c) apply only to member states without similar legislation already in place.
d) are automatically binding and member states must implement them exactly as stated in the directive.
b) describe the required outcome but leave member states to decide how they are achieved.
