18 Questions
What type of loan has an interest rate that is periodically adjusted according to changes in a designated short-term interest rate?
Floating-rate loan
Which type of loan is used to finance equipment over several years with repayment coming from future profits and cash flows of the borrower?
Long-term asset loan
What is the purpose of a bridge loan?
A business financing agreement with repayment coming from the completion of the agreement
Which type of loan represents the major loan category of banks?
Commercial and Industrial Loans
What type of loan finances the purchase, construction, and remodeling of both residential housing and commercial facilities?
Real Estate Loans
What is the purpose of a seasonal loan?
Financing working capital needs over a year with repayment coming from the reduction in working capital
What is the primary source of funds for commercial banks?
Customer deposits
What is the major asset of commercial banks?
Loans
What service do commercial banks provide to facilitate the transmission of monetary policy?
Maturity intermediation services
What is the purpose of regulating commercial banks?
To protect against a disruption in the provision of essential services
What is the accounting equation for a commercial bank's balance sheet?
Assets = Liabilities + Capital
What type of deposit liability is characterized by a checking account in which the owner can receive their funds on demand?
Demand Deposit
What is the typical repayment schedule for long-term consumer loans?
Installment basis
What type of loan is often secured by the item purchased?
Long-term Consumer Loan
Which of the following is NOT a type of loan?
Fixed Assets
What is the primary focus of a bank's leasing activities?
Business firms
What is the main purpose of a Commercial and Industrial Loan?
To support business operations and expansion
What is a key factor in determining the interest rate on a loan?
All of the above
This quiz covers the basics of commercial and industrial loans, including their categorization and types. Learn about the major loan category of banks and more.
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