Test Your Knowledge

Question 1

A mutual financial initiation which specialises in lending to customers wishing to buy a house is known as a:

Answer 1

1. Building society
2. Finance house
3. Credit union
4. Savings bank

ANSWER = building society

Question 2

A bank acts as a financial intermediary when it:

Answer 2

1. Borrows from savers and lends to borrowers
2. Puts potential borrowers in touch with potential lenders
3. Arranges a loan in return for a feee
4. Borrows from and lends to other banks

ANSWER = borrowers from savers and lend to borrowers

Question 3

Which one of the following is a technology which allows individuals to make payments to each other without a central clearing point?

Answer 3

1. Blockchain
2. Internet of things
3. Cloud computing
4. Quantum computing

ANSWER = Blockchain

Question 4

Which one of the following types of risk does the BIS (2023) define as ‘the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events’?

Answer 4

1.Operational risk
2. Credit risk
3. Compliance risk
4. Systemic risk

ANSWER = Operational risk

Question 5

Which one of the following statement about cryptocurrencies is correct?

Answer 5

1. They do not exist in physical form
2. They are safe to use because their value is stable
3. They are regulated by central banks
4. They are generally accepted by everyone

ANSWER = they do not exist in physical form