Article

Banking products and services Question solution

by Md Kamrul Hassan Tuhin

1

Which of the following is NOT a retail banking product?

Your Answer

Operating Account

Correct Answer

Operating Account

Explanation

None.


2

What is the effective rate for a credit card if it has an annual nominal rate of 15%, compounded monthly?

Your Answer

16.08%

Correct Answer

16.08%

Explanation

Effective Rate = [1+ (0.15/12)]^12 - 1 = 0.1608
0.1608 x 100 = 16.08%


3

Which of the following about credit cards is FALSE?

Your Answer

Credit card interest rates are usually similar to the interest rates for a line of credit.

Correct Answer

Credit card interest rates are usually similar to the interest rates for a line of credit.

Explanation

None.


4

Which of the following types of loans would a person use to finance a major home renovation project?

Your Answer

Personal Loans

Correct Answer

Personal Loans

Explanation

None.


5

Which of the following services are offered at no cost to private banking clients?

Your Answer

Tax Planning

Correct Answer

Tax Planning

Explanation

None.


6

Which of the following is NOT one of the “sizes” of banking for businesses discussed in this course?

Your Answer

Multinational Banking

Correct Answer

Multinational Banking

Explanation

None.


7

Which products are used to help a business manage its working capital funding gap?

Your Answer

Electronic Funds Transfer, Overdraft, Revolving Line of Credit, Business Credit Card

Correct Answer

Electronic Funds Transfer, Overdraft, Revolving Line of Credit, Business Credit Card

Explanation

None.


8

Which of the following is NOT a commercial banking product?

Your Answer

Investment Management

Correct Answer

Investment Management

Explanation

None.


9

Which of the following is a product that can be used to reduce the counterparty risk in the trade cycle?

Your Answer

Import Letter of Credit

Correct Answer

Import Letter of Credit

Explanation

None.


10

What types of loans can be syndicated?

Your Answer

All of the above

Correct Answer

All of the above

Explanation

None.


11

Which of the following is NOT a reason why banks syndicate loans?

Your Answer

Syndicated loans allow banks to work together to set fees for all major lending transactions.

Correct Answer

Syndicated loans allow banks to work together to set fees for all major lending transactions.

Explanation

None.


12

Which of the following forms of financing ranks the lowest in seniority?

Your Answer

Equity

Correct Answer

Equity

Explanation

None.


13

What is considered the primary product/service of an investment bank?

Your Answer

Raising capital for corporations

Correct Answer

Raising capital for corporations

Explanation

None.


14

What is the difference in fees between the buy-side and sell-side for M&A transactions?

Your Answer

The buy-side faces more uncertainty with the success fee because it may not be paid if the deal falls apart.

Correct Answer

The buy-side faces more uncertainty with the success fee because it may not be paid if the deal falls apart.

Explanation

None.


15

Which of the following is NOT a sell-side investment banking product or service?

Your Answer

Asset Management

Correct Answer

Asset Management

Explanation

None.


16

What is the purpose of industry coverage groups in investment banks?

Your Answer

Industry coverage groups are needed to provide the right products and services to its clients with the proper industry expertise.

Correct Answer

Industry coverage groups are needed to provide the right products and services to its clients with the proper industry expertise.

Explanation

None.


17

For companies in distress, which of the following events would NOT likely trigger a restructuring?

Your Answer

Missed dividend payment

Correct Answer

Missed dividend payment

Explanation

None.

 


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