Banking_Test_2024 (1) PDF Azerbaijan Past Paper

Excel-şablonda sütunların m N- Fennin kodu - Mövzu - Tehsil dili - cetinlik derecesi - Sual - Cavab01/Duzgun cavab - Cavab02, Cavab03, Cavab04 və...

Excel-şablonda sütunların m N- Fennin kodu - Mövzu - Tehsil dili - cetinlik derecesi - Sual - Cavab01/Duzgun cavab - Cavab02, Cavab03, Cavab04 və Cavab05 - Şablona yalnız mətn formatında olan sualları  Excel-şablonda sütunların mənası sualın nömrəsi fənnin kodudur (məs. 3902y) sualın aid olduğu mövzunun nömrəsidir (01, 02, 03 və s.) sualların dilidir (1-Azərbaycan, 2-Rus, 3-İngilis, 4-Türk) cətinlik dərəcəsinin göstəricisidir (1- asan, 2- orta, 3- çətin) sualın mətnidir düzgün cavabın mətnidir səhv cavab variantlarının mətnləridir. ında olan sualları əlavə etmək olar!  Sual The word ‘Bank’ has been derived from Choose the right definition of bank Borrowers want The money that a person places in a bank account for the bank to use to invest and that also earns interest is called a Function of financial markets Choose the best answer to define a financial claim Select the answer that does not belong to financial intermediation? Due to their influence within a financial system and an economy, banks are generally __________ in most countries. Lenders want Select the role of bank Direct finance: In general, banks make profits by selling ________ liabilities and buying ________ assets. Explanation of direct finance Choose the best answer to explain financial intermediation. Why custumers with surplus funds and customers with deficit of funds need bank as an intermediary? Which mechanism has developed demand deposits to control banks' risk aversion because changes in demand and demand for these instruments will be reflected in financing costs and these disciplines, or have forced banks to exercise caution? Every financial market has the following characteristic: Markets in which funds are transferred from those who have excess funds available to those who have a shortage of available funds are called Which of the following belong to size transformation in role of banks? Economies of scale enable financial institutions to Which statement is true Most banks operate under a system known as fractional reserve banking where they __________________________ Typical characteristics of deposits are the followings: Typical characteristics of loans are the followings: Which of the following belong to maturity transformation in role of banks? Which of them is not a direct financial participant? Which of the following is not a financial intermediary? What is the main role of financial intermediaries in an economy? The financial intermediaries that the average person interacts with most frequently are What is the purpose of transformaton roles of banks Banks perform size transformation role exploiting economies of scale associated with the lending/borrowing function, because ___________________________________ What is the goals of risk transformation role of banks? When financial intermediaries hold claims issued by other financial intermediaries, then _______________ Which of following explain why financial intermediation (banking) exists. Who are participants of direct financing Choose the primary function of bank What determines the amount of interest on the deposit? What is the most important activity of a commercial bank? Which definition of deposit is wrong? What is the motivation for public to deposit more funds to the bank? _______________that involve depositing funds for a set period of time for a pre- determined or variable rate of interest. Bank earns interest on Real estate loans are typically secured by______________ Choose the function which banks carry out on behalf of their customers? Loans are given against or in exchange of the____________ The most common type of bill of exchange is________ Which of the following is general utility function of the bank? What is the difference between demand and fixed deposits? Which of the following statements are true? Which of the following is not a primary use for deposits? Demand deposits include which of the following Which statement is correct? What is the difference between cash credit and overdraft facility? What is the role of a commercial bank while keeping the wills of the customer? Which statement is correct? In this type of deposit, interest is charged from the customer For the bank, the amount of money in the account of the accountholder is called Interest rate spread is _____________ The loans and advances are given to________ What is the benefit of the bank from remittances? Banks perform the indispensable task of: Which statement is correct? What is the difference between bank overdraft and cash credit? Who is the account holder of pension accounts? In case of which deposit the depositor can’t access or withdraw from his account since the funds are locked until maturity? Why interest rate for fixed deposit in higher than for demand deposit? Under the facility of disbursement of pension through authorised banks available to pensioners, a pensioner is entitled to receive his / her pension by getting it credited to _______________________ Banks are able to minimize the risk of individual loans by diversifying their investments, pooling risks, screening and monitoring borrowers unlike individual savers When customer gives money to a bank, customes is Which of the following do banks not do? Deficit unit is the one Surplus unit is the one The most diversified type of depository institutions is A debit card differs from a credit card in that _____________business consisted of taking deposits and making loans and the majority of their income was derived from lending business. The money that a person borrows from a bank or other financial institutions is called a _________ The primary relationship between a banker and customer starts from the time Which of the following is considered a depository financial institution? Which of the following components belongs to modern banking? In banks, loans and advances are considered: What can be the barrier to the direct financing? With using what banks convert demand deposits into 25-year residential mortgages? What is the difference between risk transformation and maturity transformation roles of bank? Which one is an agency function of bank? An overdraft facility is granted against _______________ Current account holders can draw more than his credit balance, is known as Credit cards Debit cards Bank regulations: What is the central bank able to control by printing money? Oversee and manage all the banks in their respective country and set monetary policy Which of following is major form of economic policy conducted by governments? The organization responsible for the conduct of monetary policy in the United States is the If a bank has deposits of $100,000, loans of $75,000, cash on hand of $10,000, and $12,000 on deposit at the Central Bank, then its reserve ratio is: If a bank has deposits of $250,000, loans of $80,000, cash on hand of $15,000, and $15,000 on deposit at the Central Bank, then its reserve ratio is: An important financial institution that assists in the initial sale of securities in the primary market is the Which of the following items is NOT found on the asset side of a bank’s balance sheet? Historically, a commercial bank was defined as a firm that: In the United States a commercial bank qualifies as a "bank" under federal law if it offers: What is one of the primary appeals at online banking? Which Act separated commercial banking, investment banking and insurance into three separate industries? Central Bank can serve as a lender of last resort because of: The government institution that has responsibility for the amount of money and credit suppliedin the economy as a whole is the__________ Loan can be provided in ____ currencies as per the borrowers demand in case of loan syndication A lender of last resort is a service to commercial banks from the central bank, because: The decline in traditional banking internationally can be attributed to One of them is not considered as a main function of a central bank. Which of the following is not a fundamental function of the Central Bank? Goal independence is the ability of ________ to set monetary policy ________. The Federal Reserve entity that determines monetary policy strategy is the Which of the following is not the work of Central Bank of Azerbaijan? The Chairman of the Management Board of the Central Bank shall advise the Milli Majlis of the Republic of Azerbaijan The main objectives of economic (and monetary) policy include all expect What does commercial banks probably tend to hold if there is not any government regulation? Which is not an open market operation? ____ constitute the largest source of funds for the bank The main functions of a central bank can be each of the following EXCEPT: ____________involves the targeting of a particular value of a country’s currency exchange rate thereby influencing the flows within the balance of payments. In its role as the bankers' bank, a central bank performs each of the following except: Which of the following is not one of the Fed’s monetary policy tools? Which of the following is the most flexible of the Fed’s tools for implementing monetary policy? Main bank in Azerbaijan is The primary goal of the Central Bank's activity is The Central Bank shall be solely accountable on its ac vi es to The Central Bank of Azerbaijan shall engage in the following open market transactions: Overseeing who operates banks and how they are operated is called ________. The current supervisory practice toward risk management Open market purchase by Central bank are Central banks can serve as a lender of last resort because: One of them is not the specific goals of central banks. The rationale for the "lender of last resort" function of central banks is to: _________ is concerned with the actions taken by central banks to influence the availability and cost of money and credit by controlling some measure (or measures) of the money supply and/or the level and structure of interest rates. The specific goals of central banks include each of the following EXCEPT: The goals of monetary policy does NOT include the promotion of _________________. The U.S. banking system is considered to be a dual system because Offer products and services to individual consumers including checking and savings accounts, loans, mortgages, and credit cards Work with small, medium, and large businesses to serve their financial needs by offering services such as business loans and trade finance Operate in the capital markets to help clients raise capital through underwriting and issuance of securities Full-service banks that offer retail banking, commercial banking, and investment banking services to any potential client Financial institutions that serve a specific demographic and are owned by members Banks that focus on serving individual consumers and owner-operated small companies, and tend to focus on their immediate community Banks that offer retail and small business banking services through online platforms Banks that focus on helping clients access capital markets and raise capital Mr. Sampson has $2 million in cash sitting in an operating account and is looking to invest in the stock market and earn profits on a portfolio of equities. He is most likely to seek what service? Smaller, locally focused commercial and savings banks that offer narrower but more personalized menu of financial services are known as: The banking services that includes executing buy and sell orders for security trading customers and marketing new securities to raise funds for corporations and other institutions is referred to: ___________is a subset of retail banking that caters to high-net-worth and ultra-high- net-worth individuals. Which of the following types of banks would most likely offer the largest number of financial services? Jonathan has an account in a bank that does not have a physical branch. Jonathan does all of his banking business over the internet. What type of bank does Jonathan have his account at? The Edmond National Bank serves only the City of Edmond, Oklahoma and concentrates on providing the best possible service to this city. What type of bank is this most likely to be? The main role of _________is to help companies and governments raise funds in the capital market, either through the issue of stock (otherwise referred to as equity or shares) or debt (bonds). When an investment bank ________ securities, it guarantees a price for a corporationʹs securi es and then sells them to the public. Foreign exchange and interest rate services offered to large (multinational) corporate clients include the: Which of the following is false regarding community banks? In a ________ banking system, commercial banks provide a full range of banking, securities, and insurance services, all within a single legal entity __________ have a large international presence. The primary appeal of online banking is: Which of the following is not a channel for delivering banking services? What types of banks offers retail banking services? Investment banks that are part of ________ are regulated and supervised like banks. Financial innovations occur because of financial institutions search for ________. If the Bank of England prints new money to purchase government securities (a Treasury bill or more recently a repo), then ___________ Technology Inc. is a software company based in the US, with over 600 employees in 10 locations across the country. The company has recently signed a EUR 2 mln contract with a European supplier and is looking for foreign exchange service to help facilitate the transaction. This is an example of services which would be provided in: Which of the following is NOT a typical product or service offered in retail banking? What types of banking service is offered to small firms _________________provide finance to individuals (and also companies) by making consumer, commercial and other types of loans. __________typically do not take deposits and raise funds by issuing money market and capital market instruments. All of the following are operating expenses for a bank except The inaccurate ratings provided by credit-rating agencies What is called the interest rate at a loan that is charged for commercial banks from the central bank? What country is given credit for the birth of the Eurodollar market? The spectacular growth in international banking can be explained by U.S. dollar deposits in foreign banks outside the U.S. or in foreign branches of U.S. banks are called ________. What interest rate is considered as a benchmark for which global banks lend to one another for short-term loans? What kind of trade finance are proved on the banking system to help facilitate the import and export of goods in international trading activity? The main center of the Eurodollar market is Deposits in European banks denominated in dollars for the purpose of international transactions are known as The difference between the bid price and the ask price in a forex quote is normally called _____. What is forfaiting transaction in international trading activity? In this transaction, the borrower enters into a single credit agreement with a group of lenders covering all of the loan facilities provided to the borrower by the lenders. Transaction agreement might take the place of multiple bilateral credit agreements between the borrower and each lender or be used in lieu of a participation because all of the lenders are in privity with the borrower. The explanation is related to: What is a multinational banking? The main theories describing the motives for overseas expansion relate to: Companies become multinational when they establish production in lower manual labour cost countries and headquarters where skilled labour costs are low. The statement is related to: By expanding into different markets, banks expose their operations to the risk and return profile of specific business areas is referred to as: Which of the following applies to the practice of bank expansion in foreign markets. Entrenched managers may make international investment decisions based on their own preferences for pay, power, job security, risk aversion and so on. It is related to: When a large bank undertakes investment in a foreign market it may well encourage others to follow is referred to as: One of the main objectives of the EU’s Single Market Programme has been to reduce barriers to trade in banking and financial services across all member countries in order to encourage foreign bank expansion. Meaning of Correspondent banking could be explained as: Syndicated loan is a loan that is _____ The main function of a Central Bank can be each of one except: When we refer to the shadow banking system, what are we talking about? Which of the following financial institutions holds the largest percentage of U.S. government securities? An important reason that commercial banks must be very concerned about liquidity is that Which of the following are reported as liabilities on a bank's balance sheet? Select the deposit-taking institution (DTI) Which one of the following best describes the cashless settlement? Which of the following best describes the SWIFT? LIBOR are used to reflect _____term interest rate across the globe International Banks facilitate: Which one of the following factor has not influenced emergence of International Banking?  Cavab01/Duzgun cavab The Latin word ‘bancus’ or ‘banque’ which means a bench A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets to find a loan at a particular date Deposit Improves economic efficiency It is a claim to the payment of a futurte sum of money and/or a periodic payment of money Real estate business highly regulated to achieve more liquidity Size transformation role Financial claims are created there short-term; longer-term Borrowers borrow directly from lenders in financial markets by selling financial instruments which are claims on the borrower’s future income or assets Financial intermediation is a process where funds are channeled from savers to borrowers. Both types of customers are looking for safety and liquidity commitment mechanisms It channels funds from lenders-savers to borrowers-spenders. financial markets Banks collect funds from savers in the form of small size deposits and repackage them into larger-size loans. reduce transactions costs. intermediated finance is more advantageous than direct finance hold only a small reserve of the funds deposited and lend out the rest for profit. small-size, low-risk and high-liquidity Large size, high risk and illiquid Banks transform funds lent for a short period of time into medium- and long-term loans. Financial intermediaries New York Stock Exchange Provide a mechanism by which funds are transferred and allocated to their most productive opportunities. banks Banks bridge the gap between the needs of lenders and borrowers they have access to a larger number of depositors than any individual borrower to combat risk and to differentiate and create solutions for the benefits of customers an extra layer of financial intermediation is created All Savers/depositors and borrowers Extending loans and accepting the deposits The amount of interest rate on deposit depends on the tenure (the length of time the depositor wishes to keep the money in the bank) and the ease of withdrawal. To mobilize deposits from the public A deposit is a banking product, as a result of which the client transfers money to the borrower for the period of storage. In accordance with the agreement, the bank undertakes to transfer the means of protection of interests. High rate of interest on deposit Time deposits Loan the real estate itself Remittances of fund ownership of various types of tangible items the cheque Acting as a dealer in Foreign Exchange Customer can withdraw the money anytime from a demand deposit account without advance notice. Time deposit accounts require that money be kept in the account for a set period of time. A bank's balance sheet shows that total assets equals total liabili es plus equity capital. Payment of employees Saving accont deposits and current account deposits The rate of interest for demand deposit is lower than for fixed deposit Cash credit is given to any type of account holders and also to those who do not have an account with a bank. Overdraft facility is only for current account holders. Trustee Through overdraft a customer can withdraw more money than the amount in his/her bank account. Demand deposit Deposit the difference between the rate of interest paid on deposits and charged on loans members of the public and to the business community Bank receive a profit for each remittance Intermediating between surplus-spending individuals or institutions and deficit-spending individuals or institutions The amount of interest for deposits depends on the tenure—the length of time the depositor wishes to keep the money in the bank—and the ease of withdrawal. Bank overdraft allows holders to withdraw money anytime more than available in bank balance but up to the provided limit. Through cash credit, a larger amount of loan is sanctioned than that of overdraft for a longer period. Pensioner Fixed deposit Because depositors can withdraw any or all of the funds in a demand deposit account at any time without penalty savings / current bank account risk transformation A depositor Print money Who has a financial liability Who holds a financial claim commercial banks. a credit card is a loan while for a debit card purchase, payment is made immediately. Traditional banking Loan when customer opens account Savings and Loan associations commission fee Assets The difficulty and expense of matching the complex needs of individual borrowers and lenders Maturity transformation Risk transformation role of bank serves as a buffer for unexpected losses. Maturity transformation role of bank serves for solving problems in terms of liquidity risk Acting as a Trustee collateral security Overdraft mainly provide a limit to for make payments allow you to take your money from your account serve as guidelines for sound operating policies. The availability of money and credit in a country's economy. Central Banks All of above Federal Reserve System 12%. 6.0% investment bank. deposits accepted demand deposits and made business loans. Checking accounts, commercial loans its convenience Glass-Steagall Act They have the ability to create money to stimulate banks Central bank. multiple they have the ability to create money to stimulate banks improved information technology. A central bank could also deal with the general public to provide funds. Ensure bank profitability. the central bank; goals Federal Open Market Committee Allocating funds directly to the farmers for agricultural development on key directions of monetary policy. High interest rate too little capital Making loans deposits A central bank could also deal with the general public to provide funds. Exchange rate policy Providing deposit insurance Changes in the fed funds rate Open market operations Central Bank of Azerbaijan to ensure price stability President of the Republic of Azerbaijan trade transactions with government securities, trade with its own securities; trade with foreign currency. prudential supervision evaluates the soundness of a bankʹs risk-management process buying government securities they have the ability to create money to stimulate banks high levels of imports protect depositors and reduce the likelihood of the contagion effect Monetary policy high levels of imports Low taxes it is regulated by both state and federal governments. Retails Banks Commercial Banks Investment Banks Universal Banks Credit Unions Community Banks Online Banks Investment Banks Private Banking Community banks Investment Banking Private Banking A universal bank Virtual Bank Community Bank investment banks underwrites currency futures, currency options, interest rate options, interest rate and currency swaps They typically have extensive operations in specific regions of the country. universal Global banks its convenience. Retail banking. All of above bank holding companies profits the monetary base will increase Commercial Banks tax advisory service special financing Finance companies service charges on deposit accounts meant that investors did not have the information they needed to make informed choices about their investments discount rate The Soviet Union the rapid growth in international trade Eurodollars LIBOR letter of credit, forfaiting and countertrade London. Eurodollars. Spread It refer to the exporter agrees to surrender the rights to claim for payment of goods or services delivered to an importer under a contract of sale, in return for a cash payment from a bank. syndicated loans It refers to banks having some element of ownership and control of banking operations outside their home market. factor price differentials; trade barriers; arbitrage and the cost of capital; ownership advantages; diversification of earnings; excess managerial capacity; Factor prices and trade barrier theories Diversification of earnings All of above Managerial motives Follow-the-leader strategy Government motives This simply involves using a bank located in the overseas market to provide services to a foreign bank. Typically, this kind of banks would be used by other ones to do business in markets where they have no physical presence and as such these types of services are widely used by smaller banks Provided by Group of Banks The central bank could also deal with the general public to provide funds Hedge funds, investment banks, and other nonbank financial firms that supply liquidity Commercial banks many of its liabilities are payable on demand, so the bank must have a cushion of liquidity in order to meet the withdrawal demand discount loans Commercial banks It is arranging of payments under the instruction of the customer without using any cash money or coins. It is a messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes Short Cross Border Lending and Borrowing Devalution  Cavab02 The English word `banc` which means a money Banks are intermediaries between depositors (who lend money to the bank) and card holders to maximize a substantial searching cost Bankruptcy Increases interest rates Represents the amount the costumer must pay before the financial institution will pay the claim. Investment banks not regulated to maximize counterparty risks Money transfering role There is need for financial intermediaries long-term; shorter-term Borrowers borrow indirectly from lenders via financial intermediaries (established to source both loanable funds and loan opportunities) by issuing financial instruments which are claims on the borrower’s future income or assets Financial intermediation is a process where funds are channeled from borrowers to savers. Bank channels funds from borrowers to savers thereby increasing economic efficiency by promoting a better allocation of resources information production It determines the level of interest rates. commodity markets Banks want to control a larger money supply by attracting more borrowed money and deposits. avoid the asymmetric information problem. direct finance is more advantageous than intermediated finance hold customer`s money stays in that reserve and is not loaned out. Small size, low risk and low liquidity Large size, high risk and liquid Banks are able to minimize the risk of individual loans by diversifying their investments, pooling risks, and monitoring borrowers unlike individual savers Savers Savings and Loan Bank Control cash flows in circulation and make more profit from transaction. exchanges In a rapidly changing financial market, banks are forced to adapt to these changes by performing transformation roles they have special operational systems for managing the transactions for lending take short-term sources of finance, such as deposits from savers and turn them into long-term borrowings, such as mortgages banks begin to operate under a system known as fractional reserve banking delegated monitoring Investment companies and commercial banks Acting as a trustee The amount of interest rate of the deposit directly depends on the interest rate of the loan and the term for issuing loans Brokerage operations The depositor lets the bank safe keep their money for some time, in return for which the bank pays the depositor interest payments. The bank uses this money to invest or provide loans to its borrowers and, in return, receive interests payments from them. Number of branches of the bank Current account Deposit another real estate provide the facility of safe deposit vaults ownership of bank shares pension payment Granting real estate loans The interest rate of fixed deposit is lower than demand deposit A bank's liabili es are its uses of funds. Loans Saving account deposits and fixed deposits Customer can withdraw the money anytime from a fixed deposit account. Cash credit is linked with the deposit account. Overdraft facility is linked with the plastic card. Creditor Loans and advances are both granted by banks to customers for a long period of time. Fixed Deposit Profit the interest rate charged by banks on loans plus the interest rate for demand, time, or savings deposits. Central Bank Remittance aperations are the mandatory established by the Central Bank Creating money without making loan The amount of interest for deposits depends on the Central Bank`s rules and framework Banks allow the customer to take an overdraft against a mortgage of certain property (tangible assets and / guarantees). Interest on a cash loan is higher than on an overdraft. Pension Fund demand deposit Because fixed deposits are unprofitable for bank Credit account maturity transformation A borrower Make loans Whose total expenditure is less than total income Whose total expenditure is more than total income credit unions. a debit card is a loan while for a credit card purchase, payment is made immediately. Investment banking Commercial when customer visits the bank Mortgage company asset size and growth Liabilities Compatibility of the financial needs of borrowers and lenders. Multi-stage lending Banks perform maturity transformation role because they have access to a larger number of depositors than any individual borrower. Bank`s risk transformation role means that bank is able to minimise the risk of individual loans by diversifying their investments. Providing the facility of safe deposit vaults credit account cash credit are used to control access to a resource of a card provide additional money to your account can prevent bank failures. The unemployment rate Commercial Banks Monetary policy Comptroller of the Currency 10% 11% commercial bank. loans (both current and non-current) accepted government deposits and made public loans. Consumer installment loans, CDs prevention of identity theft Bank Holding Act Only the central bank has the opportunity to lend at lower interest rates and in larger amounts commercial bank. domestic they are the only financial institution that is legally allowed to make loans during a financial panic increasing monopoly power of banks over depositors. The central bank also acts as the official agent to the government in dealing with all its gold and foreign exchange matters Conduct the nation’s monetary policy. Congress; goals Board of Governors maintain and manage international gold and foreign exchange reserves on main directions of fiscal policy. High employment too much capital, reducing the efficiency of the payments system. Central banks conduct auctions of reserves as repurchase agreements. Loans The central bank also acts as the official agent to the government in dealing with all its gold and foreign exchange matters Fiscal policy Providing loans during times of financial distress. Changes in the discount rate Changes in the fed funds rate International Bank of Azerbaijan to delivery of the report to Cabinet of Ministers of the Azerbaijan Republic four times a year Milli Mejlis of the Republic of Azerbaijan setting interest rates; setting reserve requirements for credit institutions; hazard insurance focuses on the quality of a bankʹs balance sheet. selling government securities they are the only financial institution that is legally allowed to make loans during a financial panic high and stable real growth provide low-income households with access to mortgage loans Fiscal policy low and stable unemployment rates. Maximum employment banks offer both checking and savings accounts. Commercial Banks Retails Banks Retails Banks Retails Banks Universal Banks Universal Banks Credit Unions Online Banks Business Banking Money center banks Professional Banking Business Banking A retail bank Mortgage Bank Mortgage Bank credit unions undertakes securities underwriting, syndicated lending, , currency options and interest rate options They typically operate in a limited geographic area. severable Nationwide banks prevention of identity theft. Mobile banking.. savings banks; insurance companies fame the monetary base will decrease Business Banking chequing/checking and savings accounts fund management services. Co-operative banks employee benefits were irrelevant since no one pays any attention to them anyway. yield The United States the 1988 Basel Agreement. Atlantic dollars treasury yield letter of security, factoring and barter Basel. European Currency Units. Margin This a legal banking agreement that allows importers to offer secure terms to exporters and from a bank guarantees the seller that, if various documents are presented, the bank will pay the seller the amount du participation loans It suggests that overseas activity occurs so that firms can take advantage of international factor price differences. low cost, high arbitrage; high price and trade opportunity; ownership disadvantage; high managerial skills; investment opportunity; Arbitrage and the cost of capital Ownership advantages Obtaining a foothold strategy diversification of earnings; Customer-seeking strategies Location and the product life cycle It is a separate legal entity from the parent bank, has its own capital and is organized and regulated according to the laws of the host country. Secured by Mortgages The central bank controls the issue of notes and coins The "underground" banking system used for illegal activities Credit unions liquid assets often have the highest yields. cash items in the process of collec on Building societies It provides information between payer and beneficiary customer enables to realize on-line interbank transactions, considerably increase money circulation intensity, and more flexibly manage liquidity by banks Medium Cross Border buying Disintermediation Tighter margins Disruption New demand drive  Cavab03 The French word `banquenot` which means banknote A bank is a financial institution that is not licensed to accept checking and savings deposits and can only can issue loans. to pay extra interest Mortgage Makes income Allowing the other party to make payments at will Depositor partially regulated to maximize a substantial searching cost Deposit accepting role A bank is a type of it illiquid; liquid Borrowers borrow in anywhere by selling financial instruments which are claims on the borrower’s future income or assets Financial intermediation is a national organization that holds funds for investing. Borrowers and savers don`t need an intermediary, direct financing is more safe and liquid liquidity transformation It allows common stock to be traded funds markets. Banks transform funds lent for a short period of time into medium- and long-term loans avoid adverse selection problems. the modern word economy doesn`t need intermediaries direct all of funds deposited to the issuance of loans without reservation Large size, high risk and high liquidity Small size, high risk and liquid Longer deposit periods reduce the bank's costs and allow it to lend at higher interest rates. Borrowers Commercial City Bank Lend money to people only through its own capital Insurance companies Transformation of bank helps him in competitive financial market they are controlled by Central Banks To lend money and receive interest on the lending banks provide loans to borrowers and to collect deposits from savers information production financial intermediaries and borrowers Remittances of funds The amount ofinterest rate on the deposit depends on two factors: of the bank's strategy and its liquidity Stock trade Bank deposits are a savings product that customers can use to hold an amount of money at a bank for a specified length of time. In return, the financial institution will pay the customer the relevant amount of interest, based on how much they choose to deposit and for how long. High rate of interest on loan Transaction account Deposit and loan deposit account Pension payments ownership of decision making responsibilities overdraft facility Accepting Deposits Fixed deposits are intended for large amount of money and for long term (more than 5 years). Deman deposits have no term and amount restrictions. A bank's assets are its sources of funds. Investment Current accont deposits and fixed deposits Demand deposit accounts require that money be kept in the account for a set period of time. Cash credit granted against collateral security. Overdfraft facility issued without collateral seculity. Agent In mortgage, the loan is granted against movable property Saving deposit Loan the sum of interest paid out on deposits and current accounts Customers of bank Bank don`t receive a profit for each remittance Absorbing the excess liquidity created by other financial institutions The amount of interest for deposits depends on the customer`s loan ammount in the bank Loans are issued by all banks, and overdrafts are not issued by all banks Central Bank individual deposits Because funds deposited for longer periods command a lower interest rate overdraft account duration transformation A lender Invest money Who is a lender Who is borrower finance companies. a credit card is a long-term loan while a debit card is a short-term loan International banking Interest when customer visits that bank to made queries Federal Reserve supply led Resources direct financing create additional costs for borrowers and lenders Bank`s assets The volume of loans does not match the volume of deposits, therefore fulfilling risk transformation role the bank resorts to the short-term money market to close the gap. Maturity transformation is when banks take short-term sources of finance, such as deposits from savers, and turn them into long-term borrowings, such as mortgages. Transfering of money deposit account mortgage loan do not require you to pay what you spend require you to pay back to the card account what you spend can eliminate economic risk for banks. The availability of deposit in a country’s economy Retails Banks Prices and incomes policy U.S. Treasury 9% 8% stock exchange. debt and credit cards accepted demand deposits and made consumer loans. Savings deposits, commercial loans high-volume traffic McFadden Act The interest rates they charge are so high that banks are virtually never willing to borrow from the central bank bank of settlement. one banks are more likely to borrow money from their depositors during a financial panic increased regulation A central bank acts as the government’s banker Provide an effective payments system. Congress; instruments Chairman of the Board of Governors. develop the country’s foreign debt statistics and international investment balance on key directions of exchange rate policy Price stability too much capital, making it more difficult to obtain loans. Purchasing or selling government securities. Cash A central bank acts as the government’s banker Monetary policy Managing the payments system. Changes in the required reserve ratio Changes in the required reserve ratio National Bank of Azerbaijan issue loans to the state to directly fund the state budget deficit Ministry of Finance of the Republic of Azerbaijan trade transactions with government securities, refinancing of credit institutions; maintenance of deposit transactions; regulatory interference focuses on eliminating all risk. discount rate banks are more likely to borrow money from their depositors during a financial panic low and stable unemployment rates encourage banks to hold more reserves. Exchange rate policy high and stable real growth Price stability it was established before the Civil War, requiring separate regulatory bodies for the North and South. Central Banks Central Banks Central Banks Central Banks Central Banks Central Banks Central Banks Credit Unions Commercial Banks Mutual Funds Comprehensive Packaging Commercial Banking A community bank Community Bank Affiliated Bank co-operative banks overwrites euro notes, index futures, currency futures, currency options and interest rate options They often focus on lending to small businesses. barrier-free Super regional banks high-volume traffic. b. Online banking building societies; Freddie Mac stability it`ll not influence to monetary base investment banking mortgages securities underwriting services Saving banks rent on buildings meant that investors actually took on less risk. repo Japan the desire for U.S. banks to escape burdensome domestic regulations. foreign dollars coupon yield syndicated loan, invoice discounting and asset-based finance Paris. European Monetary Units. Bid rate It is a general term used to cover a variety of commercial mechanisms for reciprocal trade and used probably the oldest and best-known example; however, other techniques such as switch-trading, buy-back, counter-purchase and offset have develope letter of credit It means that in many areas of business (and particularly in banking) it may be difficult to undertake cross-border activity without a physical presence within a country. diversification of income; economic environment; demographic advantage; consumer differentiation; attract more capital; technological advantage Ownership advantages Location and the product life cycle Follow-the-leader strategy excess managerial capacity; Customer-following strategies Diversification of earnings It is usually small and they cannot provide banking business – that is, they cannot take any transaction as deposits or making loans and used to prospect for new business and they usually act simply as marketing offices for parent banks. Unsecured The central bank also acts as the official agent to the government in dealing with all its gold and reserves The subsidiaries of depository institutions Savings and loans institutions highly liquid assets are generally not as safe as less liquid assets. Short government securities Trust companies It is credit transactions way to execute small, however recurring retail payments through e- carriers and integrate governmental entities maintaining payment operations Long Cross Border Trade and Services Emergence of Euros  Cavab04 Cavab05 The Italian word `banco` which means a The English word `banka` which means a lend chair A Bank is a financial institution which accepts None of the above money from the public for the purpose of pension payments. to maximize counterparty risks always small-size loan Loan Collateral Stops infilation Makes more investment İt is a claim the amount the customer must pay None of above before spend funds. Commercial banks Borrower regulated by other commercial banks regulated by Ministry of Finance to give a fund for a long period of time always large-size lending Foreign exchange broker role Controlling role for other financial institutions Borrower and lender are not able to meet there A type of indirect finance none of the above risky; risk-free Borrowers borrow directly from lenders Borrowers borrow indirectly in anywhere (established to source both loanable funds and by selling financial instruments which are loan opportunities) by issuing financial claims on the borrower’s future income instruments which are claims on the borrower’s or assets future income or assets Financial intermediation is classifying all the financial institutions as small, intermediate or large. All of the above It is required by international financial law None of above consumption smoothing risk transformation It allows loans to be made It determine the level of inflation derivative exchange markets none of the above Banks are able to minimize the risk of individual The bank began to conduct financial loans by diversifying their investments, transactions on a larger size, participating pooling risks, and monitoring borrowers unlike in foreign and direct financial markets. individual savers. reduce moral hazar improve symmetric information system both types of financing are equally beneficial None of above reserve all of funds deposited hold a big reserve of the funds deposited and lend out the rest for profit. small size, high risk and low liquidity Large size, low risk and high liquidity Large size, low risk and illiquid Small size, small risk and liquid Banks collect funds from savers in the form of Extending the loan duration reduces the small size deposits and repackage them into larger- bank's risk, which in itself brings more size loans profit to the bank. Financial markets Depositors Mortgage Savings Bank Agro credit Union Help to move funds from parties with missing Refers only to the collection of money capital to parties needing funds. from people over-the-counter markets finance companies Transformation role is a requirement of Transformation role helps to identify customers Central Banks and commercial bank has and as a result to encrease the fraud operations not any profit by this role they are acting as intermediary in financial market they have more liquid assets than individuals to manage one of the main bank risks- credit risk to match their assets and liabilities. online platforms interject themselves between banks are generally highly regulated by banks and customers Central Banks liquidity transformation consumption smoothing financial intermediaries and depositors customers and banks Acting as a dealer in Foreign Exchange Pension payments The amount of the interest rate on the deposit The amount of the interest rate on the depends on the income of the bank, if the income deposit depends on the strategy of bank of bank is high, then bank is ready to offer higher amount of the interest rate on deposit Money transfer Retail operations Money placed in a bank against which the A deposit refers to money or assets held depositor can withdraw under prescribed at a bank. The bank holds the money for conditions. the customer for a set amount of time under certain conditions. The absence of penalties for premature withdrawal The established tenure for deposits Checking account Money market account Commisions Borrowing from the other banks hypothecation of jewellery business property Acting as a dealer in Foreign Exchange Granting Loans funds in a deposit account cheque book demand deposit Real estate loan Granting bank overdraft Acting as a Trustee The fixed deposit account holders need to Fixed deposit allows you to withdraw maintain minimum balance which varies across deposit anytime customer want. For different banks. Demand deposit accounts offer demand deposit there is a lock-in period higher interest rates than fixed deposit accounts before you are allowed to make the withdrawal A bank's balance sheet shows that total assets A bank's balance sheet shows that total more than total liabili es plus equity capital. assets less than total liabilities plus equity capital. Withdrawals None of above All types of deposits None of the answer options In case depositors withdraw demand deposit None of above before maturity, banks levy a penalty for premature withdrawal. Cash credit allows holders to withdraw money Through cash credit, a larger amount of anytime more than available in bank balance but loan is sanctioned than that of overdraft up to the provided limit. Overdraft facility up to a specific limit fixed in advance. Beneficiary Dealer in Foreign Exchange A customer prefers overdraft to a loan because None of above bank pays an interest for the overdraft facility Time deposit none of the above Interest Overdraft the difference between the rate of interest the difference of interest paid out on charged on loans and overdraft deposits and current accounts Card holders Members of Executive Board Remittance operations have direct influence to None of above the reputation of bank Issuing risky deposits None of the above The amount of interest for deposits is the same for None of above all commercial banks Calculation of interest rate for cash loan based on For overdraft new account needs to be the entire amount that is withdrawn. opened. Cash credit can be availed from Calculation of interest rate for overdraft based on an existing account only the amount that is availed. Current bank none of the above values in deposit vault saving deposit Because demand deposits and time deposits do none of the above not differ in terms of availability or liquidity joint bank accounts fixed deposit account size transformation None of above A plastic card holder A withdrawer Take deposits Make money transfer Who holds a financial claim Who works in a bank Who has a financial liability Who works in a bank savings associations mutual funds. a debit card is a long-term loan while a credit card a debit card is a long-term loan while a is a short-term loan credit card is interest-free loan Classic banking Modern banking Deposit Sertificate of deposit when customer call the bank Taking lona through ATM Mutual fund Insurance company only loan and deposit all of above Expenditure None of these the cost of direct financing outweigh the benefits None of these associated with direct financing Investment funds liquidity transformation Bank is bearing a refinancing or reinvestment risk Maturity transformation role of bank and this role is known as risk transformation role means bundling many small-sized savings of bank. Maturity transformation is the practice by to fund bigger loans. Risk transformation banks of borrowing money on shorter timeframes role of bank means that individual than they lend money out. borrowers carry a risk of default. Acting as a dealer in Foreign Exchange Pension payments money on plastic card the ammount of deposits in another banks advance remittance in most cases provide additional money without allow you to withdraw your salary from interest to your account your account provide a limitless credit for make are used to control access to a resource of the card payments guarantee bankers will make sound management guarantee bankers act in an ethical decisions. manner. Government expenditures Tax revenues Community Banks Investment Banks Exchange rate policy Fiscal policy Bureau of Monetary Affairs Central bank 5% 15% 7% 12% brokerage house credit union mortgages trading assets accepted NOW accounts and made is regulated by the Federal Reserve. consumer loans. Security investments, inventory loans to business customers Commercial deposit accounts, consumer savings plans the ability to make small dollar purchases lack of face-to-face interaction Federal Reserve Act Competitive Equality Banking Act Banks are more likely to borrow money from their All of the above depositors during a financial panic monetary fund. investment bank two foreign because only the central bank has the opportunity the interest rates they charge are so high to lend at lower interest rates and in larger that banks are virtually never willing to amounts borrow from the central bank increased protection from competition. decreased protection from competition It has the power to control the amount of credit- The central bank controls the issue of money created by banks notes and coins (legal tender)  All of the above are fundamental Regulate banking operations. functions of the Federal Reserve. the central bank; instruments the central bank; functions Shadow Open Market Committee none of the above establish and implement the country’s monetary regularly set and announce an official and foreign exchange policy exchange rate of Manat on key directions of debt mnagement policy. on key directions of social policy. Stable economic growth Stable financial markets too much capital, reducing the profitability of too much capital, reducing the banks. creditability of banks. Purchasing and selling foreign exchange. none of the above Commisions Interest It has the power to control the amount of credit- The central bank controls the issue of money created by banks notes and coins (legal tender) Interest rate policy Credit policy. Overseeing commercial banks and the Make low and stable inflation. financial system All of the above are monetary policy tools of the Open market operations Fed Changes in the discount rate Private placements Agriculture Bank of Azerbaijan Kapital Bank of Azerbaijan purchase of debt securities issued by the foreign making profit governments Minsitry of Economy of the Republic of Cabinet of Minsiters Republic of Azerbaijan Azerbaijan setting interest rates; trade with foreign currency. setting reserve requirements for credit setting reserve requirements for credit institutions; maintenance of deposit institutions; maintenance of deposit transactions; transactions;  moral regulation loan loss reserves determines whether capital requirements have focuses on decreasing credit risk. been met. reserve requirement foreign direct investment because only the central bank has the opportunity the interest rates they charge are so high to lend at lower interest rates and in larger that banks are virtually never willing to amounts borrow from the central bank low and stable inflation high and stable real income Provide high income investors with access to increase bank lending to firms that are at business loans risk of bankruptcy. Interest rate policy Credit policy high and stable real income low and stable inflation. Interest rate stability Financial market stability it actually includes both banks and thrift it actually includes only investment banks institutions. Community Banks Investment Banks Community Banks Investment Banks Community Banks Commercial Banks Investment Banks Commercial Banks Investment Banks Commercial Banks Investment Banks Commercial Banks Investment Banks Commercial Banks Central Banks Commercial Banks Retails Banks Large Banks Fringe banks State banks Wrap-around Accounts Private Banking Retails Banking Large Banking A commercial bank An international bank Affiliated Bank None of the above Mortgage Bank None of the above saving banks commercial banks overtakes finances  repurchase agreements, forward euro notes, index futures, currency futures, commitment, currency options and currency options and interest rate options interest rate swaps The bulk of their funding comes from deposits. They tend to grow at a modest rate. dividerless dual Regional banks Specialty Banks e. the ability to make small dollar purchases. lack of face-to-face interaction. Automated Teller Machines. Branch banking. commercial banks; finance houses. Fannie Mae Conmercial banks competition recognition the lending will reduce None of above Retails Banks Large Banks personal loans debt and credit cards foreign exchange and interest rate-related transactions commitments and guarantees. Private banking Corporate banking servicing costs of equipment such as computers. salaries meant that investors actually took high risk. will not be a problem when determining capital requirements under Basel 2 policy rate refinancing England China the creation of the World Trade Organization the creation of the IMF European Currency Units. outside dollars KIBOR federal rate asset-based finance, forfaiting and countertrade exchange, eurodollar loan and factoring New York Moscow International Monetary Units. Spacial Drawing Rights Ask rate Discount rate Such an agreement offers security to the seller, as This is one for which the arrangers it is an assurance of payment from an guarantee the entire commitment and international bank, on the condition that the then syndicate the loan to other banks terms of the letter of credit are complied with. and institutional investors factoring integrated loans It states that the investment decisions of This means that in many areas of business it may banks stem from a conscious effort by be difficult to undertake cross-border activity managers to diversify earnings and without a physical presence within a country. therefore reduce risk. diversification of income; economic factor price differentials; trade barriers; high environment; ownership disadvantage; arbitrage; high price and trade opportunity; high managerial skills; diversification of technological advantage; investment opportunity earnings; excess managerial capacity; Diversification of earnings Location and the product life cycle Obtaining a foothold strategy Customer-following strategies Performance and efficiency advantages Managerial motives Follow-the-leader strategy Performance and efficiency advantages Managerial motives Theory of excess managerial capacity  Managerial motives Arbitrage and the cost of products It is similar to branches in that they form an It can perform all the functions that are integral part of the parent bank and lie allowed by the banking authorities of the somewhere between branches and representative host country, namely taking loans and offices as they can do less than the former and making deposits, as well as selling other more than the latter. types of products and services. Provided to a Group of Customers Provided by Group of Credit Unions The central banks act as the Government’s bank All of the above Saving and commercial banks all of the above Central bank Finance companies it strengthen banks' transparency and it must remain liquid to remain solvent. disclosures reserves Longterm fixed rate securities  Pension funds Insurance companies It is payment obligations Cash payment It is payment obligations It is credit transactions Federal Discount rate Cross Border Investments Cross Border exchange Internationalisation /Globalisation increased competition