Commercial Banks and Investment Banks (AQA A-Level Economics): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What is the primary difference between commercial and investment banks?
What is the primary difference between commercial and investment banks?
Commercial banks accept public deposits
What are the two primary functions of commercial banks?
What are the two primary functions of commercial banks?
Accept deposits and create deposits
What happens when a bank makes a loan to a customer?
What happens when a bank makes a loan to a customer?
Creates an advance and a new deposit
What does systemic risk refer to in banking?
What does systemic risk refer to in banking?
Risk of entire banking system breakdown
When did ring fencing of retail and investment banking become law in the UK?
When did ring fencing of retail and investment banking become law in the UK?
1 January 2019
What percentage of broad money is actual cash according to the note?
What percentage of broad money is actual cash according to the note?
2.6%
If banks operate a 5% cash ratio, what total deposits result from a 50,000 USD deposit?
If banks operate a 5% cash ratio, what total deposits result from a 50,000 USD deposit?
1,000,000 USD
Which bank asset is the most liquid but earns no interest?
Which bank asset is the most liquid but earns no interest?
Cash (notes and coins)
What is the main trade-off in prudent retail banking?
What is the main trade-off in prudent retail banking?
Liquidity against profitability
What service do investment banks provide when they underwrite share issues?
What service do investment banks provide when they underwrite share issues?
Guarantee to buy unsold shares for a fee