Dollars and Sense: Bank Challenge Quiz
Banks have come under scrutiny with the tumultuous economy -- they do much more than just hold on to your money for you. Take the quiz and see if you know how banks really work.
Banks are critical to the U.S. economy because their primary function is to:
- keep customers' money safe and stored in a vault
- make money transactions more convenient for customers
- put customers' money to use by lending it out to others
In response to the banking crisis during the Great Depression, the United States government:
- subsidized private insurance companies to take insurance on risky banks
- established the U.S. Government's Federal Deposit Insurance Corporation (FDIC) to insure bank deposits
- did nothing and let the free market fix itself
How do banks make money?
- charging borrowers a higher interest rate than they pay out to depositors
- charging fees to those who use banking services
- both of the above
Who is primarily responsible for protecting the public from unsafe banking practices?
- bank tellers
- the agency that charters the bank
- the U.S. Congress
In deciding whether to issue a charter to a bank, an agency will asses the directors' and CEOs':
- credit histories
- education histories
- romantic histories
Bank organizers are responsible for contributing what percentage of the capital requirements to start a bank?
- 10 to 15 percent
- 50 to 55 percent
- 70 to 75 percent
The Federal Reserve Act requires banks to:
- warn depositors when they are in danger of failing
- banks to take on risky loans
- keep a certain percentage of their money in reserve
Which of the following types of accounts is a kind of checking account that pays interest?
- money market account
- certificate of deposit
- NOW account
What is a holding company?
- a company holding a little stock with not much actual power over a bank
- a company holding a significant amount of stock who can control elections and other bank policy matters.
- a company that is left holding the bag for a failed bank
The FDIC typically insures depositors for up to: