Test on Commercial Banks: Functions, Loans, and Risks

Question 1: Active operations of commercial banks are primarily focused on acquiring sources that help a bank to conduct its business activities, such as receiving deposits.

A. Ano

B. Ne

Explanation: Passive operations of commercial banks are focused on acquiring sources, such as receiving deposits, that help a bank to conduct its business activities. Active operations, in contrast, involve the bank acting as a creditor and using gained money for business activities, such as making loans.

Question 2: According to the study materials, which of the following is an essential part of the legal definition of a commercial bank?

A. It is established as a limited liability company.

B. It must primarily engage in securities trading and consulting.

C. It is a legal entity headquartered in the SR.

D. It is licensed to receive deposits and make loans.

Explanation: The study materials define a bank as 'a legal entity headquartered in the SR that is established as a join-stock company and is licensed to receive deposits + make loans'. Therefore, being a legal entity headquartered in the SR, and being licensed to receive deposits and make loans are essential parts of its legal definition. Option 0 is incorrect because it is established as a 'join-stock company', not a limited liability company. Option 1 describes other activities, not the essential legal definition.

Question 3: A bank overdraft is considered an immediate reserve on a client's account and is available anytime.

A. Ano

B. Ne

Explanation: According to the study materials, a bank overdraft is an immediate reserve on a client's account and is available anytime.

Question 4: According to the study materials, which action is directly associated with a bank adhering to the Principle of Return when granting a loan?

A. Assessing the reliability and solvency of the borrower.

B. Requiring the loan to be secured by property or a guarantor.

C. Ensuring the loan is provided for a strictly specified purpose.

D. Determining if the loan will be short-term, medium-term, or long-term.

Explanation: The Principle of Return states that the bank runs a risk that the client won't be able to pay repayments and interest. Therefore, to adhere to this principle, the bank assesses the reliability and solvency of the borrower by making an analysis of the client's financial management.

Question 5: A key advantage of electronic banking is the enhanced opportunity for direct face-to-face contact with bank employees.

A. Ano

B. Ne

Explanation: Electronic banking is characterized by communication with the bank without face-to-face contact with bank employees. Therefore, enhanced direct face-to-face contact is not an advantage listed for electronic banking; rather, it's the opposite.