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General Flashcards

7 cards from real Banking Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 General flashcards as text

  1. Which of the following is an example of a secured loan?

    Answer: Mortgage

    A mortgage is secured by the property being purchased, which the lender can seize if the borrower defaults.

  2. What does the term 'amortization' refer to in banking?

    Answer: Gradual repayment of a loan through scheduled payments covering principal and interest

    Amortization is the process by which loan payments are structured so that each payment gradually reduces the principal balance.

  3. Which regulatory body charters and supervises national banks in the United States?

    Answer: Office of the Comptroller of the Currency (OCC)

    The OCC charters, regulates, and supervises all national banks and federal savings associations.

  4. A bank's 'liquidity' refers to its ability to:

    Answer: Meet short-term financial obligations without significant loss

    Liquidity is a bank's ability to quickly convert assets to cash to meet depositor withdrawals and other obligations.

  5. What is 'collateral' in the context of a bank loan?

    Answer: An asset pledged by the borrower to secure the loan

    Collateral is property or assets a borrower pledges to the lender, which can be seized if the borrower defaults.

  6. Which act established the Consumer Financial Protection Bureau (CFPB)?

    Answer: Dodd-Frank Wall Street Reform and Consumer Protection Act

    The Dodd-Frank Act of 2010 created the CFPB to regulate consumer financial products and services.

  7. What does 'KYC' stand for in banking compliance?

    Answer: Know Your Customer

    KYC (Know Your Customer) is a mandatory process banks use to verify client identities and assess potential risks.