2024 | EMS | Test 2
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Questions and Answers

What technological advancement began to shift banking operations towards the internet in the early 2000s?

  • Internet banking (correct)
  • ATM networks
  • Electronic fund transfers
  • Mobile banking

    • The Minister of Finance oversees both traditional banks and non-bank financial institutions.

    True

    What was one of the primary functions of early banks?

  • Storing extra goods and surplus money (correct)
  • Offering credit cards
  • Trading of stocks
  • Providing insurance

    • What is one key function of the Financial Services Board?

    <p>Overseeing regulations and policy for financial services.</p> Signup and view all the answers

    What is the primary purpose of saving money for unexpected expenses?

    <p>To avoid borrowing money during difficult times</p> Signup and view all the answers

    The Bank of England was established in the early medieval period.

    <p>False</p> Signup and view all the answers

    The __________ manages retirement savings and pension plans.

    <p>Pension Funds</p> Signup and view all the answers

    Who established the Medici bank and in what year?

    <p>Giovanni Medici, 1397</p> Signup and view all the answers

    Match the following departments/branches with their primary focus:

    <p>Financial Markets = Stock markets and financial markets Pension Funds = Retirement savings and pension plans Registrar of Financial Institutions = Non-bank financial institution oversight Long-term Insurers = Long-term insurance products</p> Signup and view all the answers

    Saving money in a bank does not earn any interest.

    <p>False</p> Signup and view all the answers

    Banks offer additional financial services such as _____ and stock trading.

    <p>insurance</p> Signup and view all the answers

    What is one reason why saving for retirement is important?

    <p>To ensure financial security when you can no longer work.</p> Signup and view all the answers

    Match the following historical banking terms with their definitions:

    <p>Merchant = Someone who buys and sells goods Renaissance = Period marking the end of the Middle Ages Bank of England = Opened in 1694 Medici bank = Established by Giovanni Medici in 1397</p> Signup and view all the answers

    To avoid the higher cost of credit, it is wise to save money for __________ purchases.

    <p>large</p> Signup and view all the answers

    Match the reasons for saving with their corresponding descriptions:

    <p>Unexpected Expenses = Avoid borrowing during emergencies Retirement = Ensure security in later years Large Purchases = Buy expensive items with cash Starting a Business = Initiate entrepreneurial ventures</p> Signup and view all the answers

    Which institution controls the banking sector in South Africa?

    <p>South African Reserve Bank</p> Signup and view all the answers

    The first negotiable certificate of deposit in South Africa was introduced in 1949.

    <p>False</p> Signup and view all the answers

    In what year was formal banking introduced in South Africa?

    <p>1793</p> Signup and view all the answers

    By the end of the 20th century, _____ held 95% of the banking assets in South Africa.

    <p>ABSA, Standard Bank, First National Bank, and Nedbank</p> Signup and view all the answers

    Match the following terms with their descriptions:

    <p>ABSA = One of the major banks in South Africa National Finance Corporation = Established in 1949 to address funds trading issues SARB = Controls the banking sector NCD = First negotiable certificate of deposit introduced in 1961</p> Signup and view all the answers

    What is required to avoid monthly fees in a savings account?

    <p>Minimum balance</p> Signup and view all the answers

    Clients earn interest on their savings regardless of the interest rate.

    <p>False</p> Signup and view all the answers

    What are two ways clients can access their savings accounts?

    <p>Debit card, ATM card</p> Signup and view all the answers

    Clients earn interest as a percentage of the money they ______.

    <p>deposit</p> Signup and view all the answers

    Match the following features of savings accounts with their descriptions:

    <p>Minimum Balance = Prevents transaction fees Interest Rates = Percentage earned on deposits ATM Card = Access to cash withdrawals Online Account Opening = Setting up an account via the internet</p> Signup and view all the answers

    Which bank is considered a key example of early modern banking?

    <p>Medici Bank</p> Signup and view all the answers

    Banks originally started as simple systems for storing extra goods.

    <p>True</p> Signup and view all the answers

    What significant role do banks play in modern finance?

    <p>They keep money safe and offer diversified financial services.</p> Signup and view all the answers

    The first modern bank, the Medici Bank, was established in _____ by Giovanni Medici.

    <p>1397</p> Signup and view all the answers

    Match the following historical banking practices with their descriptions:

    <p>Currency = A system used to facilitate trade and replace bartering Money lenders = Individuals who loaned money and accepted deposits in ancient civilizations Grain loans = Loans provided by merchants to farmers in early banking Government regulation = Laws established to ensure the safety of customer deposits</p> Signup and view all the answers

    What primary service is typically offered by savings accounts?

    <p>Competitive interest rates</p> Signup and view all the answers

    Current accounts are primarily designed for saving money.

    <p>False</p> Signup and view all the answers

    What is one key advantage of credit cards?

    <p>They are accepted at over 20 million outlets worldwide.</p> Signup and view all the answers

    The bank charges for ____ accounts are typically higher than those for savings accounts.

    <p>current</p> Signup and view all the answers

    Which of the following services can be linked to current accounts?

    <p>Cheque books</p> Signup and view all the answers

    Match the following types of banking accounts with their primary use:

    <p>Savings Account = Used for saving money Current Account = Used for managing daily expenses Credit Card = Used for borrowing money Overdraft Facility = Allows spending beyond account balance</p> Signup and view all the answers

    Banks have client care centres to enhance service delivery.

    <p>True</p> Signup and view all the answers

    Why is it important for banks to keep up with technological advances?

    <p>To meet the changing needs of clients and improve service efficiency.</p> Signup and view all the answers

    What is one of the primary purposes of personal savings?

    <p>To prepare for unexpected expenses</p> Signup and view all the answers

    Community savings schemes, also known as stokvels, are designed to help individuals save collectively.

    <p>True</p> Signup and view all the answers

    Name one financial institution that promotes entrepreneurship.

    <p>Microfinance banks</p> Signup and view all the answers

    The role of banks includes providing services such as __________ accounts.

    <p>savings</p> Signup and view all the answers

    Match the following banking services with their descriptions:

    <p>Savings account = A deposit account that earns interest Loan = Borrowing money with a repayment plan Credit card = A plastic card allowing deferred payment Investment advice = Guidance on how to grow wealth through investments</p> Signup and view all the answers

    What is one of the first steps in opening a savings account?

    <p>Choosing a bank that best suits your needs</p> Signup and view all the answers

    You must be accompanied by a legal guardian to open a savings account if you are a student or scholar.

    <p>True</p> Signup and view all the answers

    What act was implemented in South Africa to combat money laundering?

    <p>Financial Intelligence Centre Act 28 of 2001</p> Signup and view all the answers

    To open a savings account, you must be at least ______ years old.

    <p>18</p> Signup and view all the answers

    Match the following requirements to open a savings account with their descriptions.

    <p>Proof of residence = Use for identity verification Application forms = Required to open an account Initial deposit = Money you need to provide upfront Age requirement = Must be 18 or older</p> Signup and view all the answers

    Which of the following is NOT a factor to consider when choosing a bank?

    <p>Number of ATMs worldwide</p> Signup and view all the answers

    All account holders are exempt from providing proof of residence when opening a savings account.

    <p>False</p> Signup and view all the answers

    What is the purpose of a savings account?

    <p>To save money and earn interest</p> Signup and view all the answers

    What is the maximum repayment period for vehicle finance?

    <p>60 months</p> Signup and view all the answers

    Interest rates on homeloans are entirely independent of the repo rate set by the central bank.

    <p>False</p> Signup and view all the answers

    What type of account provides fixed-period investments with fixed interest amounts?

    <p>Fixed deposits</p> Signup and view all the answers

    Investment accounts can be invested locally or abroad, with interest rates increasing with higher __________.

    <p>balances</p> Signup and view all the answers

    Match the following financial products with their descriptions:

    <p>Homeloans = Used to purchase residential properties or land Vehicle Finance = Funds for new vehicles and related expenses Money Market Accounts = Investments that can be local or offshore Fixed Deposits = Investments with fixed interest over a fixed period</p> Signup and view all the answers

    Study Notes

    Banking History

    • Throughout history, people have collected materials and hoarded goods
    • This led to the problem of not knowing where to store extra stock
    • Systems of bartering were developed as a way to exchange goods
    • Later, currency in the form of money replaced bartering
    • The concept of money developed
    • The problems of keeping surplus (extra) money arose
    • The first banks were created by merchants
    • Merchants carried goods between cities
    • In ancient Greece and during the Roman Empire, banks were where people deposited money
    • In the Renaissance (14th-16th centuries), banking expanded
    • The Medici family were known for starting Italian banks
    • In 1397, the Medici bank was established
    • In 1694, the Bank of England opened, including safeguarding funds, lending, and exchange services
    • Banks evolved to include multiple services: insurance, home loans, stock trading, and credit card facilities

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    Description

    Test your knowledge on the evolution of banking operations, financial services, and the role of institutions. This quiz covers historical banking functions, the importance of saving, and key advancements in the banking sector. Perfect for students or anyone interested in finance and banking history.

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