2nd Year Principles of Banking Chapter 2 TestCommercial Bank

Q1. Multiple choice questions (Attempt all · 10 × 1 = 10)

1. Commercial bank advises its customers on:

   1. Household matters

   2. Financial matters

   3. Political matters

   4. All the above

2. Which one is a function of a commercial bank:

   1. Issuing a currency notes

   2. Creating credit money

   3. Rediscounting bills of exchange

   4. Preparing monetary policy

3. Which bank protect the precious articles of public into the custody:

   1. Central bank

   2. Industrial bank

   3. Commercial bank

   4. All of these

4. Formula for calculating total credit creation:

   1. Formula?

   2. Formula?

   3. Formula?

   4. All the above are possible

5. Which type of loan is advanced by commercial banks for meeting day – to – day requirements.

   1. Short term loan

   2. Medium term loan

   3. Long term loan

   4. All the above

6. Which of the following functions is performed by commercial bank:

   1. Issuance of currency notes

   2. Credit creation

   3. Rediscounting of bills

   4. Preparation of monetary policy

7. Commercial bank creates the following money:

   1. Metallic

   2. Credit

   3. Paper

   4. All the above

8. The basic objective of commercial bank is:

   1. To earn profit

   2. To help the govt

   3. To help the poor

   4. To issue notes

9. Commercial bank can be regarded by nature as:

   1. Depository bank

   2. Central bank

   3. Investment bank

   4. None of the above

10. Credit is created by:

    1. Commercial bank

    2. Company

    3. Central bank

    4. Firm