A bank takes a deposit from a customer. This is recorded in the bank's balance sheet as
a. an asset
b. a liability
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B) A LIABILITY
Question 13 (1 point)
An certificate of deposit is similar to
a. a debenture
b. a promissory note
c. an ordinary share
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B) A PROMISSORY NOTE
Question 14 (1 point)
An arrangement in which a bank allows a business to place its operating account into deficit up to an agreed limit is called
1. an overdraft
2. a fixed term loan
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1) AN OVERDRAFT
Question 15 (1 point)
Which of the following is an example of off-balance-sheet business?
a. bill acceptance
b. letters of credit
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B) LETTERS OF CREDIT
Question 16 (1 point)
The two main categories of bank assets are term deposits and current deposits.
a. True
b. False
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B) FALSE
Question 17 (1 point)
Company A arranges for a bank to accept a bill. The bank charges Comapny A a fee. Company A sells the bill in the market to Company B at a price calculated to yield Company B a rate of simple interest of i p.a. For the overall transaction including the bank fee, the rate of simple interest p.a. being paid by Company A is
a. less than i
b. equal to i
c. more than i
C) MORE THAN I