A bank takes a deposit from a customer. This is recorded in the bank's balance sheet as

  a. an asset    
  b. a liability    

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B) A LIABILITY 
 
Question 13  (1 point) 
     An certificate of deposit is similar to

  a. a debenture    
  b. a promissory note    
  c. an ordinary share    

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B) A PROMISSORY NOTE
 
Question 14  (1 point) 
     An arrangement in which a bank allows a business to place its operating account into deficit up to an agreed limit is called

  1. an overdraft    
  2. a fixed term loan    

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1) AN OVERDRAFT
 
 
Question 15  (1 point) 
     Which of the following is an example of off-balance-sheet business?

  a. bill acceptance    
  b. letters of credit    

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B) LETTERS OF CREDIT
 
Question 16  (1 point) 
     The two main categories of bank assets are term deposits and current deposits.

  a. True    
  b. False    

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B) FALSE

 
Question 17  (1 point) 
     Company A arranges for a bank to accept a bill. The bank charges Comapny A a fee. Company A sells the bill in the market to Company B at a price calculated to yield Company B a rate of simple interest of i p.a. For the overall transaction including the bank fee, the rate of simple interest p.a. being paid by Company A is

  a. less than i    
  b. equal to i    
  c. more than i    

C) MORE THAN I