CQIB NZ EXAM QUESTIONS WITH
CORRECT ANSWERS
What |is |the |role |of |banks? |- |CORRECT |ANSWER✔✔-Act |as |a |financial |intermediary, |create |
products |and |services, |and |develop |mechanisms |for |making |payments.
What |is |financial |intermediation? |- |CORRECT |ANSWER✔✔-Pools |funds |from |savers |and |
provides |loans |to |borrowers.
What |is |retail |banking? |- |CORRECT |ANSWER✔✔-Taking |deposits |and |lending |to |individuals.
What |is |business |banking? |- |CORRECT |ANSWER✔✔-Taking |deposits |and |lending |to |small |or |
medium |sized |business |enterprises.
What |is |wholesale |banking? |- |CORRECT |ANSWER✔✔-Borrowing |from |and |lending |to |corporate
|clients |or |other |financial |institutions.
What |is |investment |banking? |- |CORRECT |ANSWER✔✔-Serve |high |net |worth |customers |in |
functions |of |capital |market |activities, |i.e |bonds |& |shares, |trading |and |mergers |and |
acquisitions.
What |are |debt |capital |markets? |- |CORRECT |ANSWER✔✔-Where |capital |is |raised |through |the |
issue |of |bonds. |Investment |banks |are |involved |to |plan, |manage |and |sell |the |bonds.
What |are |equity |capital |markets? |- |CORRECT |ANSWER✔✔-Where |funds |are |raised |by |
undertaking |an |Initial |Public |Offering |(IPO), |selling |shares |to |the |public |for |the |first |time.
What |are |private |placements? |- |CORRECT |ANSWER✔✔-Plan |an |offering |of |bonds |with |an |
institutional |investor |that |has |lower |regulatory |requirements.
,What |is |mergers |and |acquisitions? |- |CORRECT |ANSWER✔✔-Companies |look |to |purchase |
another |company |and |investment |banks |offer |advice |on |the |process |and |pricing.
What |are |Chinese |walls? |- |CORRECT |ANSWER✔✔-Barriers |to |mitigate |exchanges |of |
information |that |could |lead |to |conflict |of |interest.
What |is |accepting |deposits? |- |CORRECT |ANSWER✔✔-The |banks |first |core |function. |It |is |how |
banks |source |the |majority |of |their |funds.
What |is |granting |loans? |- |CORRECT |ANSWER✔✔-The |banks |second |core |function.
What |is |an |overdraft? |- |CORRECT |ANSWER✔✔-A |defined |credit |limit |attached |to |a |bank |
account |that |can |be |drawn |against.
What |is |a |credit |card? |- |CORRECT |ANSWER✔✔-Allows |for |the |purchase |of |goods |and |services |
within |a |certain |limit |that |can |be |paid |back |later.
What |are |bills |of |exchange |and |promissory |notes? |- |CORRECT |ANSWER✔✔-Specialised |
instruments, |an |unconditional |order |between |parties |where |the |bank |purchases |the |bill |
amount |and |on |maturity |the |borrower |pays |the |full |amount.
What |is |equipment |leasing |and |hire |purchase? |- |CORRECT |ANSWER✔✔-Forms |of |borrowing |to
|finance |plant, |machinery |and |vehicles.
What |is |trade |finance? |- |CORRECT |ANSWER✔✔-Facilitation |of |import |and |export |transactions |
e.g |lending, |letters |of |credit, |insurance.
,What |is |a |short |term |loan? |- |CORRECT |ANSWER✔✔-Principal |and |interest |repayments |are |
made |over |a |period |of |say |five |years, |e.g |for |a |car.
What |is |a |long |term |loan? |- |CORRECT |ANSWER✔✔-Principal |and |interest |repayments |are |
made |over |a |period |of |say |25 |years, |e.g |for |a |house.
What |is |Electronic |Funds |Transfer |(ETF)? |- |CORRECT |ANSWER✔✔-Funds |transferred |
electronically |between |banks.
What |are |negotiable |instruments? |- |CORRECT |ANSWER✔✔-Banks |drafts, |cheques |and |letters |
of |credit.
What |are |periodic |payments? |- |CORRECT |ANSWER✔✔-Direct |Debits |and |Standing |Orders, |
where |the |bank |makes |payments |on |behalf |of |the |customer.
What |are |periodic |collections? |- |CORRECT |ANSWER✔✔-Direct |Credits, |where |the |bank |collects
|payments |on |behalf |of |the |customer.
What |are |debit |cards? |- |CORRECT |ANSWER✔✔-Allows |for |the |purchase |of |goods |and |services,
|and, |deducts |the |money |directly |from |the |customers |bank |account.
What |are |international |money |transfers? |- |CORRECT |ANSWER✔✔-Allows |for |the |transfer |of |
funds |overseas.
What |are |E-Commerce |Payment |Systems? |- |CORRECT |ANSWER✔✔-Allows |businesses |to |
accept |electronic |payments |with |settlement |on |the |same |day.
What |is |insurance? |- |CORRECT |ANSWER✔✔-A |contract |between |two |parties, |whereby |one |
party |agrees |to |make |payment |to |another |party, |who |will |assume |liability |should |an |agreed |
event |occur.
, What |is |transfer |of |risk? |- |CORRECT |ANSWER✔✔-A |risk |management |technique |whereby |risk |
of |loss |is |transferred |to |another |party.
What |is |wealth |management? |- |CORRECT |ANSWER✔✔-Investment |+ |Superannuation |+ |
Retirement |Products.
What |are |safe |custody |services? |- |CORRECT |ANSWER✔✔-The |Safekeeping |of |valuable |assets |
and |documents.
What |is |portfolio |management? |- |CORRECT |ANSWER✔✔-Personalised |management |of |a |
customer's |investments.
What |are |personal |advisory |services? |- |CORRECT |ANSWER✔✔-Private |Bank |function |supplying
|specialist |advice.
What |are |corporate |advisory |services? |- |CORRECT |ANSWER✔✔-Specialist |area |of |banking |
associated |with |raising |capital |for |corporate |clients.
What |is |liquidity? |- |CORRECT |ANSWER✔✔-Bank's |ability |to |meet |all |of |its |anticipated |
expenses |including |making |payments |on |debt |using |only |liquid |assets.
What |is |solvency? |- |CORRECT |ANSWER✔✔-Ability |of |a |bank |to |meet |its |long |term |financial |
obligations.
What |is |profitability? |- |CORRECT |ANSWER✔✔-Ability |to |generate |earnings |compared |to |its |
expenses.
CORRECT ANSWERS
What |is |the |role |of |banks? |- |CORRECT |ANSWER✔✔-Act |as |a |financial |intermediary, |create |
products |and |services, |and |develop |mechanisms |for |making |payments.
What |is |financial |intermediation? |- |CORRECT |ANSWER✔✔-Pools |funds |from |savers |and |
provides |loans |to |borrowers.
What |is |retail |banking? |- |CORRECT |ANSWER✔✔-Taking |deposits |and |lending |to |individuals.
What |is |business |banking? |- |CORRECT |ANSWER✔✔-Taking |deposits |and |lending |to |small |or |
medium |sized |business |enterprises.
What |is |wholesale |banking? |- |CORRECT |ANSWER✔✔-Borrowing |from |and |lending |to |corporate
|clients |or |other |financial |institutions.
What |is |investment |banking? |- |CORRECT |ANSWER✔✔-Serve |high |net |worth |customers |in |
functions |of |capital |market |activities, |i.e |bonds |& |shares, |trading |and |mergers |and |
acquisitions.
What |are |debt |capital |markets? |- |CORRECT |ANSWER✔✔-Where |capital |is |raised |through |the |
issue |of |bonds. |Investment |banks |are |involved |to |plan, |manage |and |sell |the |bonds.
What |are |equity |capital |markets? |- |CORRECT |ANSWER✔✔-Where |funds |are |raised |by |
undertaking |an |Initial |Public |Offering |(IPO), |selling |shares |to |the |public |for |the |first |time.
What |are |private |placements? |- |CORRECT |ANSWER✔✔-Plan |an |offering |of |bonds |with |an |
institutional |investor |that |has |lower |regulatory |requirements.
,What |is |mergers |and |acquisitions? |- |CORRECT |ANSWER✔✔-Companies |look |to |purchase |
another |company |and |investment |banks |offer |advice |on |the |process |and |pricing.
What |are |Chinese |walls? |- |CORRECT |ANSWER✔✔-Barriers |to |mitigate |exchanges |of |
information |that |could |lead |to |conflict |of |interest.
What |is |accepting |deposits? |- |CORRECT |ANSWER✔✔-The |banks |first |core |function. |It |is |how |
banks |source |the |majority |of |their |funds.
What |is |granting |loans? |- |CORRECT |ANSWER✔✔-The |banks |second |core |function.
What |is |an |overdraft? |- |CORRECT |ANSWER✔✔-A |defined |credit |limit |attached |to |a |bank |
account |that |can |be |drawn |against.
What |is |a |credit |card? |- |CORRECT |ANSWER✔✔-Allows |for |the |purchase |of |goods |and |services |
within |a |certain |limit |that |can |be |paid |back |later.
What |are |bills |of |exchange |and |promissory |notes? |- |CORRECT |ANSWER✔✔-Specialised |
instruments, |an |unconditional |order |between |parties |where |the |bank |purchases |the |bill |
amount |and |on |maturity |the |borrower |pays |the |full |amount.
What |is |equipment |leasing |and |hire |purchase? |- |CORRECT |ANSWER✔✔-Forms |of |borrowing |to
|finance |plant, |machinery |and |vehicles.
What |is |trade |finance? |- |CORRECT |ANSWER✔✔-Facilitation |of |import |and |export |transactions |
e.g |lending, |letters |of |credit, |insurance.
,What |is |a |short |term |loan? |- |CORRECT |ANSWER✔✔-Principal |and |interest |repayments |are |
made |over |a |period |of |say |five |years, |e.g |for |a |car.
What |is |a |long |term |loan? |- |CORRECT |ANSWER✔✔-Principal |and |interest |repayments |are |
made |over |a |period |of |say |25 |years, |e.g |for |a |house.
What |is |Electronic |Funds |Transfer |(ETF)? |- |CORRECT |ANSWER✔✔-Funds |transferred |
electronically |between |banks.
What |are |negotiable |instruments? |- |CORRECT |ANSWER✔✔-Banks |drafts, |cheques |and |letters |
of |credit.
What |are |periodic |payments? |- |CORRECT |ANSWER✔✔-Direct |Debits |and |Standing |Orders, |
where |the |bank |makes |payments |on |behalf |of |the |customer.
What |are |periodic |collections? |- |CORRECT |ANSWER✔✔-Direct |Credits, |where |the |bank |collects
|payments |on |behalf |of |the |customer.
What |are |debit |cards? |- |CORRECT |ANSWER✔✔-Allows |for |the |purchase |of |goods |and |services,
|and, |deducts |the |money |directly |from |the |customers |bank |account.
What |are |international |money |transfers? |- |CORRECT |ANSWER✔✔-Allows |for |the |transfer |of |
funds |overseas.
What |are |E-Commerce |Payment |Systems? |- |CORRECT |ANSWER✔✔-Allows |businesses |to |
accept |electronic |payments |with |settlement |on |the |same |day.
What |is |insurance? |- |CORRECT |ANSWER✔✔-A |contract |between |two |parties, |whereby |one |
party |agrees |to |make |payment |to |another |party, |who |will |assume |liability |should |an |agreed |
event |occur.
, What |is |transfer |of |risk? |- |CORRECT |ANSWER✔✔-A |risk |management |technique |whereby |risk |
of |loss |is |transferred |to |another |party.
What |is |wealth |management? |- |CORRECT |ANSWER✔✔-Investment |+ |Superannuation |+ |
Retirement |Products.
What |are |safe |custody |services? |- |CORRECT |ANSWER✔✔-The |Safekeeping |of |valuable |assets |
and |documents.
What |is |portfolio |management? |- |CORRECT |ANSWER✔✔-Personalised |management |of |a |
customer's |investments.
What |are |personal |advisory |services? |- |CORRECT |ANSWER✔✔-Private |Bank |function |supplying
|specialist |advice.
What |are |corporate |advisory |services? |- |CORRECT |ANSWER✔✔-Specialist |area |of |banking |
associated |with |raising |capital |for |corporate |clients.
What |is |liquidity? |- |CORRECT |ANSWER✔✔-Bank's |ability |to |meet |all |of |its |anticipated |
expenses |including |making |payments |on |debt |using |only |liquid |assets.
What |is |solvency? |- |CORRECT |ANSWER✔✔-Ability |of |a |bank |to |meet |its |long |term |financial |
obligations.
What |is |profitability? |- |CORRECT |ANSWER✔✔-Ability |to |generate |earnings |compared |to |its |
expenses.
