Unit 1, Topic 1

Question 1

Which of these important functions enables a person to work out that they can rent four films on a streaming service for the same price as buying one physical DVD?

A) Medium of exchange
B) Unit of account
C) Store of value

Answer 1

B) Unit of Account

Question 2

How can a bank involved in wholesale banking raise money quickly in order to finance business activities?
A) By a further issue of shares
B) By borrowing from the Bank of England
C) By calling in their debts
D) From the interbank market

Answer 2

D) From the interbank market

Question 3

A financial transaction that is carried out directly between an organisation with surplus finds to lend and one that needs to borrow is an example of:
A) Demutualisation
B) Disintermediation

Answer 3

B) Disintermediation

Question 4

Which one of the following is not a role of the Bank of England?
A) A) To regulate the supply of money and manage gold reserves
B) To act as financial ombudsman in resolving customer complaints about banks
C) To act as advisor to the government
D) To set interest rates

Answer 4

B) To act as financial ombudsman in resolving customer complaints about banks

Question 5

Which institution issues UK banknotes?
A) The Bank of England
B) The Treasury
C) The Royal Mint

Answer 5

A) The Bank of England

Question 6

Credit unions cannot pay interest on savings. True or False

Answer 6

False

Question 7

Freshfood Ltd supplies fruit and vegetables to market traders and small shops. The banking transactions it carries out are an example of:
A) Wholesale banking
B) Retail banking

Answer 7

B) Retail banking

Question 8

Who is responsible for administering SONIA?
A) The FCA
B) The Bank of England
C) The Monetary Policy Committee
D) The Prudential Regulation Authority

Answer 8

B) The Bank of England