Banking and Financial Institutions
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Questions and Answers

What is the primary function of a bank?

  • Investing in capital markets
  • Issuing credit cards
  • Providing insurance services
  • Accepting deposits and making loans (correct)

    • What is fractional-reserve banking?

  • A system where banks hold liquid assets exceeding their liabilities
  • A system where banks hold liquid assets equal to all of their liabilities
  • A system where banks hold liquid assets equal to only a portion of their liabilities (correct)
  • A system where banks do not hold any liquid assets

    • What are banks generally subject to in order to ensure stability?

  • Minimum capital requirements based on international standards (correct)
  • Maximum capital requirements based on national standards
  • Regulations on profit margins
  • No capital requirements

    • Where did banking in its modern sense evolve?

    <p>Renaissance Italy</p> Signup and view all the answers

    What is the oldest existing retail bank?

    <p>Banca Monte dei Paschi di Siena (founded in 1472)</p> Signup and view all the answers

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