Level 3 BTEC Business Financial Institutions
Exam Questions And Answers
Bank of England - - -
correct answer ✅This is the UK's central bank with responsibility
for maintaining a healthy level of financial stability.
Advantages of the Bank of England - - -
correct answer ✅1. Responsible for protecting the financial
stability of the economy as a whole.
2. Setting interest/ inflation rates.
Disadvantages of the Bank of England - - -
correct answer ✅1. Not a bank for members of the general public.
2. Can raise interest rates which makes borrowing more expensive.
Banks - - -
correct answer ✅An organisation that handles financial
transactions and keeps money on behalf of its customers.
Advantages of Banks - - -
correct answer ✅1. Offers a range of services and account types.
2. Provides a secure place to store money.
3. Pays interest on credit balances.
, Level 3 BTEC Business Financial Institutions
Exam Questions And Answers
Disadvantages of Banks - - -
correct answer ✅1. Savings are only protected up to £75,000.
2. Costs to customers may be higher to fulfil shareholder objectives.
Building Societies - - -
correct answer ✅Organisations that handle financial transactions
and stores money on behalf of its members.
Advantages of Building Societies - - -
correct answer ✅1. Offers a range of services and account types
2. Owned by members and costs can be kept down resulting in
higher interest payments.
Disadvantages of Building Societies - - -
correct answer ✅1. Savings are only protected up to the value of
£75,000.
2. May lack the business drive of a commercial bank.
Exam Questions And Answers
Bank of England - - -
correct answer ✅This is the UK's central bank with responsibility
for maintaining a healthy level of financial stability.
Advantages of the Bank of England - - -
correct answer ✅1. Responsible for protecting the financial
stability of the economy as a whole.
2. Setting interest/ inflation rates.
Disadvantages of the Bank of England - - -
correct answer ✅1. Not a bank for members of the general public.
2. Can raise interest rates which makes borrowing more expensive.
Banks - - -
correct answer ✅An organisation that handles financial
transactions and keeps money on behalf of its customers.
Advantages of Banks - - -
correct answer ✅1. Offers a range of services and account types.
2. Provides a secure place to store money.
3. Pays interest on credit balances.
, Level 3 BTEC Business Financial Institutions
Exam Questions And Answers
Disadvantages of Banks - - -
correct answer ✅1. Savings are only protected up to £75,000.
2. Costs to customers may be higher to fulfil shareholder objectives.
Building Societies - - -
correct answer ✅Organisations that handle financial transactions
and stores money on behalf of its members.
Advantages of Building Societies - - -
correct answer ✅1. Offers a range of services and account types
2. Owned by members and costs can be kept down resulting in
higher interest payments.
Disadvantages of Building Societies - - -
correct answer ✅1. Savings are only protected up to the value of
£75,000.
2. May lack the business drive of a commercial bank.
