12 Questions
What is the PRIMARY purpose of a financial intermediary?
To facilitate credit transactions between lenders and borrowers
Which type of banking institution is typically focused on providing credit to borrowers in rural areas?
Rural banking
What is the MAIN function of a line of credit provided by a bank?
To provide a predetermined amount of funds a bank is willing to lend to a borrower
Which type of institution is MOST LIKELY to specialize in automobile financing through installment sales contracts?
Sales finance companies
What is the MAIN purpose of a loan agreement between a business and a bank?
To outline the terms of a loan, including maximum amounts and interest rates
Which type of banking institution is PRIMARILY responsible for accumulating savings from depositors and investing them in various assets, including real estate mortgages?
Savings and mortgage banks
What is the key role of private development banks?
Focusing on economic development and investing in loans for economic growth
In the context of credit, what distinguishes a sales finance company from other financial institutions?
Financing purchases through installment sales contracts
Which institution is primarily responsible for issuing loans and accepting deposits?
Commercial banks
What distinguishes a line of credit from a loan agreement?
Line of credit has no predetermined amount
What is a primary function of savings and mortgage banking institutions?
Accumulating savings from depositors
Which term refers to an arrangement where one party receives money with an agreement to repay it later, often with interest?
Credit
Test your knowledge on key terms related to credit, sources of credit, financial intermediaries, and commercial banking. Explore definitions and concepts used in the financial world.
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