Business Finanace

Question 1

What is a financial institution?

Answer 1

Institutions that act as a financial intermediary in channeling funds from lenders to borrowers or from savers to investors

Question 2

Examples of financial institutions

Answer 2

central bank, commercial banks, credit unions, insurance companies, building societies, government agencies

Question 3

Roles of the central bank

Answer 3

• issues notes and coins to commercial banks
• managaes foreign exchange reserves
• regulates the economy through monetary policy
• lends money to commercial banks if necessary

Question 4

Roles of commercial banks

Answer 4

• provides a save place for deposits
• offer loans to the public
• offers standing orders
• offers investments
• accepts deposits for lending activities

Question 5

What is a credit union?

Answer 5

A non-profit cooperative that allows its members to borrow money from pooled deposits at reasonable rates of interest

Question 6

What is a building society?

Answer 6

These are owned by their members and lend money for mortgage. The money is from the members who have saving accounts with the building society

Question 7

What are insurance companies?

Answer 7

These protect businesses and individuals from financial loss in case of an unforseen event. It also provides financial protection in case of death or poor health

Question 8

What are micro-lending agencies?

Answer 8

These provide small loans for those who dont qualify for loans from larger institutions or those with low or irregular incomes

Question 9

Government agencies

Answer 9

ministry of finance, ministry of commerce, public accounting committee

Question 10

Functions offered

Answer 10

loans or credit facilities
savings and deposits
making payments
investments

Question 11

Services offered

Answer 11

night safe deposits
online banking
credit/debit cards
deposit boxes

Question 12

What is a financial regulatory body?

Answer 12

The different bodies governing or regulating the policies for financial institutions

Question 13

What are financial regulations?

Answer 13

rules governing how financial institutions that receive deposits and make loans can do

Question 14

List financial regulatory bodies

Answer 14

central bank, financial services commission, independent statuary bodies

Question 15

The regulatory role of the central bank

Answer 15

issues banking licenses
charge minimum reserve requirements
varying the liquid assets ratio
regulating inflation and unemployment through monetary policy

Question 16

What is the FSC?

Answer 16

The Financial Services Commission is a regulatory agency established by the government with the responsibility of regulating non bank financial institutions

Question 17

Roles of the FSC

Answer 17

ensures:
institutions follow operation guidelines
businesses are transparent and easy to understand
business are fit and proper to operate

Question 18

Central bank functions include

Answer 18

controls the currency
manages public debt
issues treasury bills
promote financial stability

Question 19

Ways to manage personal incomes

Answer 19

saving, investment, budgeting, getting financial advice

Question 20

What is investment?

Answer 20

the risk of spending money on capital goods or financial instruments with the hope of making a profit later

Question 21

List forms of investment

Answer 21

stock market
government securities
mutual funds

Question 22

Types of shirt tern financing

Answer 22

trade credit
commercial bank loans
promissory notes
installment credit
indigenous credit or private money lenders

Question 23

Types of short term loans

Answer 23

advances from customers
debt factoring
venture capitalists
crowd funding
angel investors

Question 24

Types of long term financing

Answer 24

loans from government agencies
mortgages
debentures