PRINCIPLES OF BANKING ANSWERS AND
QUESTIONS SET A+
✔✔Separations of duties - ✔✔to separate one big job into several small jobs, with a
different individual performing each.
✔✔Measures that are taken to prevent someone or something from an undesirable
outcome are called _____. - ✔✔safeguards
✔✔What are rules and regulations that are put into place to guard assets owned by a
person or a company? - ✔✔Internal controls
✔✔How many goals are there for having effective safeguards in place in the banking
industry? - ✔✔5
✔✔Bankruptcy - ✔✔A legal process to get out of debt when you can no longer make all
your required payments
✔✔Chapter 7 Bankruptcy - ✔✔a liquidation bankruptcy and occurs when their assets
are of little value and the debts are so large that reorganizing the company is just not
possible. All secured creditors are paid first.
✔✔Secured Creditor - ✔✔a person who has loaned money to another and has a legally
recognized interest in the property of the debtor until fulfillment of the terms of the debt
agreement
✔✔Chapter 11 Bankruptcy - ✔✔Reorganization of a business where company can
operate with pre-bankruptcy management in place while the entitlement of lenders and
investors are reorganized to replace a failed capital structure.
✔✔Chapter 13 Bankruptcy - ✔✔creates a plan with the court explaining how the
company will pay back its debts. Keep non-exempt property. Only for sole proprietorship
, ✔✔Clothing and household items are examples of what type of property? - ✔✔Exempt
✔✔Who gets paid first when liquidating assets? - ✔✔Secured creditors
✔✔Which type of bankruptcy is Chapter 7? - ✔✔Liquidation
✔✔Who can file Chapter 13? - ✔✔Sole proprietors
✔✔A procedure in which the court helps eliminate or pay off debts is known as what? -
✔✔Bankruptcy
✔✔ Banking System - ✔✔A group or networks of institutions that provide financial
services
Operating a payment system
Providing Loans
Deposits
Helping with Investments
✔✔Credit Union - ✔✔Not-for-profit organizations owned by members and overseen by a
board of directors
✔✔commercial bank - ✔✔A financial institution that accepts demand deposits and
makes loans and provides other services for the public
✔✔NCUSIF (National Credit Union Share Insurance Fund) - ✔✔oversees the quality
and operations of thousands of federal credit unions. Similar to FDIC
✔✔FDIC (Federal Deposit Insurance Corporation) - ✔✔the government agency that
insures customers' deposits if a bank fails
✔✔Investment Banks - ✔✔Financial institutions that assist firms in the process of
issuing securities to investors. Investment banks also advise firms engaged in mergers
and acquisitions, and they are active in the business of selling and trading securities in
secondary markets.
Responsible for putting your money to work on the corporate level.
✔✔Initial Public Offering (IPO) - ✔✔the first time a company issues stock that may be
bought by the general public
✔✔Best Efforts Underwriting - ✔✔the type of underwriting in which the underwriter sells
as much of the issue as possible, but can return any unsold shares to the issuer without
financial responsibility
QUESTIONS SET A+
✔✔Separations of duties - ✔✔to separate one big job into several small jobs, with a
different individual performing each.
✔✔Measures that are taken to prevent someone or something from an undesirable
outcome are called _____. - ✔✔safeguards
✔✔What are rules and regulations that are put into place to guard assets owned by a
person or a company? - ✔✔Internal controls
✔✔How many goals are there for having effective safeguards in place in the banking
industry? - ✔✔5
✔✔Bankruptcy - ✔✔A legal process to get out of debt when you can no longer make all
your required payments
✔✔Chapter 7 Bankruptcy - ✔✔a liquidation bankruptcy and occurs when their assets
are of little value and the debts are so large that reorganizing the company is just not
possible. All secured creditors are paid first.
✔✔Secured Creditor - ✔✔a person who has loaned money to another and has a legally
recognized interest in the property of the debtor until fulfillment of the terms of the debt
agreement
✔✔Chapter 11 Bankruptcy - ✔✔Reorganization of a business where company can
operate with pre-bankruptcy management in place while the entitlement of lenders and
investors are reorganized to replace a failed capital structure.
✔✔Chapter 13 Bankruptcy - ✔✔creates a plan with the court explaining how the
company will pay back its debts. Keep non-exempt property. Only for sole proprietorship
, ✔✔Clothing and household items are examples of what type of property? - ✔✔Exempt
✔✔Who gets paid first when liquidating assets? - ✔✔Secured creditors
✔✔Which type of bankruptcy is Chapter 7? - ✔✔Liquidation
✔✔Who can file Chapter 13? - ✔✔Sole proprietors
✔✔A procedure in which the court helps eliminate or pay off debts is known as what? -
✔✔Bankruptcy
✔✔ Banking System - ✔✔A group or networks of institutions that provide financial
services
Operating a payment system
Providing Loans
Deposits
Helping with Investments
✔✔Credit Union - ✔✔Not-for-profit organizations owned by members and overseen by a
board of directors
✔✔commercial bank - ✔✔A financial institution that accepts demand deposits and
makes loans and provides other services for the public
✔✔NCUSIF (National Credit Union Share Insurance Fund) - ✔✔oversees the quality
and operations of thousands of federal credit unions. Similar to FDIC
✔✔FDIC (Federal Deposit Insurance Corporation) - ✔✔the government agency that
insures customers' deposits if a bank fails
✔✔Investment Banks - ✔✔Financial institutions that assist firms in the process of
issuing securities to investors. Investment banks also advise firms engaged in mergers
and acquisitions, and they are active in the business of selling and trading securities in
secondary markets.
Responsible for putting your money to work on the corporate level.
✔✔Initial Public Offering (IPO) - ✔✔the first time a company issues stock that may be
bought by the general public
✔✔Best Efforts Underwriting - ✔✔the type of underwriting in which the underwriter sells
as much of the issue as possible, but can return any unsold shares to the issuer without
financial responsibility
