Take your time to read instructions before taking this test.

There are 40 questions which you are to answer in 15 minutes that gives you roughly 30 seconds per question.

If you can get at least 60%, you can be rest assured that you’ll ace FIN 201 exam

In a normal exam you will be asked between 40 – 60 questions but I only arranged 40 questions

Note

Do not be in a hurry to answer the questions

Do not waste time on a question you don’t know

Move as fast as possible and starting with questions that don’t have calculation first to save time

Always crosscheck

Don’t be in a hurry to submit, you are not in a competition

Don’t be scared. Getting an A is easy

Don’t be over confident, you can end up a D, E or F. Calm your blood, no be only you sabi book

Please do well to use our comment box incase there’s a message you want to pass to us

70 – 100 A

60 – 69 B

50 – 59 C

45 – 49 D

40 – 44 E

0 – 39 F

I wish you success

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FIN 201

1 / 40

1. Highlight the term describing the process through which banks create new credits when loans are issued.

A. Credit creation

B. Asset securitization

C. Financial intermediation

D. Fractional reserve

2 / 40

2. State the primary factor contributing to economies of scale in banking.

A. Increased production

B. Customer loyalty

C. Technology adoption

D. Cost reduction

3 / 40

3. Emphasize the feature of banking automation reducing redundancy in human labor.

A. Process optimization

B. Staff deployment

C. Error detection

D. Cost reduction

4 / 40

4. Specify a disadvantage of banking automation.

A. High acquisition costs

B. Increased efficiency

C. Reduced error rates

D. Greater customer satisfaction

5 / 40

5. Recognize the theory explaining money creation by the banking system as a whole, not individual banks.

A. Intermediation theory

B. Fractional reserve theory

C. Credit creation theory

D. Money multiplier theory

6 / 40

6. Define the key factor influencing customer demand for banking services.

A. Income level

B. Government policy

C. Technology

D. Marketing strategies

7 / 40

7. Indicate the critical output resulting from customer deposits and bank lending.

A. Statutory reserves

B. Credit facilities

C. Fund storage

D. Profit generation

8 / 40

8. Describe the element ensuring banks meet operational challenges

A. High reserve funds

B. Manual processing

C. Limited credit facilities

D. Advanced technology

9 / 40

9. Highlight the component that evaluates the efficiency of resource utilization in banking.

A. Deposit ratio

B. Turnaround time

C. Loan approval time

D. Return on equity

10 / 40

10. Describe the service enabling customers to access funds exceeding their deposits.

A. Fixed deposit

B. Loan advances

C. Credit extension

D. Overdraft

11 / 40

11. Indicate the tool used by banks to manage financial risks effectively.

A. Reserve fund allocation

B. Credit policies

C. Automation

D. Employee training

12 / 40

12. Point out the reason banks impose transaction costs on accounts.

A. Reduce service quality

B. Improve savings habits

C. Cover operational expenses

D. Encourage deposits

13 / 40

13. Mention the key advantage of mergers for smaller banks.

A. Higher operational costs

B. Declined efficiency

C. Reduced profitability

D. Immediate scaling up

14 / 40

14. State the primary goal of operating costs in banking.

A. Reducing losses

B. Ensuring day-to-day maintenance

C. Maintaining liquidity

D. Maximizing profit

15 / 40

15. Emphasize the cost banks incur due to automation maintenance.

A. Reduced employee training costs

B. Reduced operational challenges

C. Increased customer satisfaction

D. High infrastructure expenses

16 / 40

16. Mention the key advantage of mergers for smaller banks.

A. Immediate scaling up

B. Reduced profitability

C. Declined efficiency

D. Higher operational costs

17 / 40

17. Highlight the advantage of online banking for customers.

A. Restricted service hours

B. Continuous access to services

C. Limited product offerings

D. Increased transaction fees

18 / 40

18. Indicate the method banks use to reduce errors in service delivery.

A. Outsourcing

B. Customer feedback

C. Automation

D. Employee training

19 / 40

19. Highlight the process enabling banks to perform transactions with reduced human intervention.

A. Manual processing

B. Risk assessment

C. Branch banking

D. Digital automation

20 / 40

20. Identify the component critical to financial intermediation success.

A. Employee redundancy

B. Credit assessment

C. Physical infrastructure

D. Customer complaints

21 / 40

21. Indicate the tool used by banks to manage financial risks effectively

A. Reserve fund allocation

B. Employee training

C. Credit policies

D. Automation

22 / 40

22. Define the focus of performance measurement in banking.

A. Customer satisfaction

B. Staff training

C. Branch location

D. Operational complexity

23 / 40

23. Emphasize the service banks provide for transferring funds between locations.

A. Overdrafts

B. Payment guarantees

C. Fund remittance

D. Loan advances

24 / 40

24. Highlight a critical metric for measuring bank performance.

A. Turnaround time

B. Return on assets

C. Market share

D. Product variety

25 / 40

25. Recognize the benefit derived by banks from mergers and acquisitions.

A. Decreased operational capacity

B. Enhanced competitive strength

C. Reduced market presence

D. Declined financial gains

26 / 40

26. Emphasize the main advantage of branch automation.

A. Enhanced physical infrastructure

B. Standardization of services

C. Increased human interaction

D. Improved manual record-keeping

27 / 40

27. Highlight the primary cause of credit rationing in banking.

A. Limited supply of loanable funds

B. Low customer demand

C. Surplus credit availability

D. Excess funds availability

28 / 40

28. State the major challenge associated with mergers and acquisitions in banking.

A. Improved efficiency

B. Cultural misfit

C. Increased customer base

D. Better resource utilization

29 / 40

29. Mention the process banks use to mobilize funds from surplus units to deficit units.

A. Risk diversification

B. Financial intermediation

C. Liquidity creation

D. Asset management

30 / 40

30. Point out the type of reserve maintained by commercial banks due to regulatory requirements.

A. Voluntary reserve

B. Statutory reserve

C. General reserve

D. Depreciation reserve

31 / 40

31. Emphasize the undesirable output in banking operations.

A. Earnings

B. Deposits

C. Advances

D. Loan-loss provisions

32 / 40

32. Indicate the advantage customers gain from economies of scale in banking.

A. Enhanced marketing strategies

B. Limited product variety

C. Reduced costs of services

D. Higher interest rates

33 / 40

33. Emphasize the essential source of funds for commercial banks

A. Deposits

B. Government bonds

C. Loans from other banks

D. Shareholder equity

34 / 40

34. Identify the primary reason banks collect reserve funds.

A. Enable fund distribution

B. Comply with regulations

C. Increase profitability

D. Safeguard customer deposits

35 / 40

35. Define the key benefit of capital adequacy in banking operations.

A. Enhanced stability

B. Reduced competition

C. Limited market reach

D. Declined operational capacity

36 / 40

36. Identify the primary role banks play in a market-based economy.

A. Trade facilitation

B. Wealth creation

C. Financial intermediation

D. Tax collection

37 / 40

37. Indicate the purpose of statutory reserves for banks.

A. Increase loan issuance

B. Reduce branch operations

C. Comply with legal requirements

D. Maximize profits

38 / 40

38. Mention the factor affecting demand for banking services due to poor accessibility of branches.

A. Availability of bank branches

B. Service charges

C. Income levels

D. Transaction costs

39 / 40

39. Identify the output commonly associated with banking operations.

A. Fixed assets

B. Human resources

C. Loan and advances

D. Reserve funds

40 / 40

40. Identify the component critical to financial intermediation success

A. Physical infrastructure

B. Employee redundancy

C. Credit assessment

D. Customer complaints

Your score is

The average score is 53%

FIN 201 CBT PRACTICE

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