NOUN e-exam

BFN104 Past Questions & Answers

National Open University of Nigeria NOUN Exam Pastquestion Compilation for BFN104 Past Questions & answer from Different Years of Exams, Be free to contribute your Past questions

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BFN104 Past Questions With Answers

1: Elements of Banking provides student with a ———— understanding of the subject matter.

Answer: conceptual

2: “This is the process of legally organizing an outfit to create, safe-keep, manage and transfer money from one person to another, from business to business or in a nut shell between surplus and deficit spending economic agents/ units”. What type of business does this statement refer?

Answer: Banking

3: Why did majority of the banks fail in the 1950s ________

Answer: lack of regulation

4: At the epicenter of a nation’s financial system is its ___________

Answer: Central Bank

5: _________ is the difference between loans and advances

Answer: Tenor

6: What is the full meaning of BOFIA?

Answer: Banks and Other Financial Institutions Act

7: When was the Central Bank of Nigeria established?

Answer: 1959

8: Who is the current Governor of the Central Bank of Nigeria?

Answer: Godwin Emefiele

9: Which organization has acceptance of deposits as its primary function?

Answer: Commercial banks

10: What common name would you call Mortgage bank, Micro finance bank, Development bank and Community bank?

Answer: Specialized banks

11: From the economic stand point defined money in terms of ————–

Answer: function

12: Fixed, Inventory and _______ are types of Investment

Answer: Replacement

13: A bill is discharged when all the orders it contains have been_______

Answer: carried out

14: Money can be demanded for the following motives: Transaction, Precaution and —-

Answer: Speculative

15: Legal Department is a ________ form of Departmentalization?

Answer: Functional

16: Commercial paper is one of the ___________ of the money market

Answer: instruments

17: What do you call the system that involves exchanging merchandise for merchandise?

Answer: Barter

18: Y = C + S + I + G + (x-m). Y represents ___________ in the equation

Answer: National income

19: ————-refers to the several of a country’s money supply in order to measure the money supply in an economy.

Answer: Money aggregates

20: The money market is a market where ———- funds are bought and sold.

Answer: short term

21: Treasury bills, Treasury certificates, Commercial paper, Call money, Certificates of deposit, Bankers Unit Fund and Eligible Development Stock. What are these collectively called?

Answer: Money market instruments

22: —————is a financial intermediary licensed by the government to buy and sell foreign currencies on a small scale.

Answer: Bureau de change

23: The monetary sector of the economy is anchored by the ———- sector

Answer: banking

24: ———- to save measures how much of the additional disposable income is saved i.e. not consumed

Answer: Marginal Propensity

25: A balance sheet is a financial statement that provides a snap shot of the __________ position of a business at a particular at point in time, usually the of a business’s financial year.

Answer: financial

26: A _______ is a bill of exchange drawn on a banker and payable on demand.

Answer: cheque

27: Autonomous Investment and —————- investment were identified by Keynes

Answer: Induced

28: Cost of capital asset Expected rate of return and ———– are determinants of Investment

Answer: Market rate of interest

29: What does the acronym NPV represent _________

Answer: Net Present Value

30: _________ refers to the highest rate of return expected from a additional unit of a capital asset over its cost.

Answer: Marginal Efficiency of Capital

31: The economy of any country is basically driven by the banking system, as it contributes to ________ development

Answer: economic

32: National Income = Consumption + ————–

Answer: Investment

33: What concept did Bernard Mandeville first introduce?

Answer: Paradox of Thrift

34: Cash flow of a bank involves sources and ______ of funds

Answer: uses

35: These are parties in a bill of exchange transaction: Drawer, Drawee, Acceptor, Endorser and ——————–

Answer: Payee

36: Bills can be classified on the basis of time/period namely: Demand and ——

Answer: Time

37: ———— is the process of transferring a bill of exchange from one person to another such that the benefits written on the bill the becomes payable to the new holder

Answer: Endorsement

38: _________ is a term that is commonly used to describe the way business firms are managed

Answer: Corporate governance

39: Parties to a cheque include Drawee, Drawer and ————-

Answer: Payee

40: ————is a written order, signed by the drawer (i.e. the customer) that is used by a drawer to notify the drawee (i.e. the bank) to stop the payment of a cheque, he had previously issued.

Answer: Countermand

41: Types of Endorsement are Special, Blank and __________

Answer: Restrictive

42: Banks channel scarce resources from surplus economic units to ——– units.

Answer: deficit

43: What are the basic conditions for lending? (a) Character, (b) Capacity-contractual, (c) Capital, (d) Condition and (e) __________

Answer: Collateral

44: It has been previously held that for a person to be a Bank customer, it is essential and indispensable that the person should have________ in the bank

Answer: opened an account

45: Two basic principles actually guide the design of the organization structure of a bank: Principle of unity of objective and ————-

Answer: Principle of efficiency

46: The Nigeria banking system could be said to be a mixture of the branch banking system and the —— system

Answer: unit banking

47: What body does Chief Executives of all banks in Nigeria and the Governor of the CBN as Chairman constitute?

Answer: Bankers Committee

48: The three basic types of fund transmission modes used in correspondent banking are SWIFT, Mail and Telegraphic transfers (cable transfers) and ———–

Answer: Electronic

49: What does this acronym, IBRD stand for?

Answer: International Bank for Reconstruction and Development

50: What Regulation concerns cheques and funds transfer, as per cheque collection and returns, cash and non-cash items processes through central bank, as well as fund transfer through feel wire?______

Answer: Regulation J

1: What other name is commercial bank known?

Answer: Acceptance house

2: Banking and banking business is said to be highly

Answer: regulated

3: As a Banker and Lender of Last Resort to banks, the CBN performs the following functions except

Answer: Printing of bank notes

4: Which is the first merchant bank to be established in Nigeria?

Answer: NAL Merchant Bank

5: What is the basis of Institutional definition of Money?

Answer: Backed by the force of law

6: At what point is the evolution of money?

Answer: Electronic

7: What does Yd represent in this equation: Yd = C + S?

Answer: Disposable income

8: What does this equation Y = C + I, mean?

Answer: National Income = Consumption + Investment

9: The structure of banks could generally be analysed in terms of the following characteristics, except

Answer: Initial paid up capital

10: What is the full meaning of the acronym, SWIFT?

Answer: Society for Worldwide Inter-Bank Financial Telecommunications

11: Eliminate the option that is not a type of bank lending

Answer: Foreign exchange loan

12: The bank financial statement may contain the following information except

Answer: Government budget expenses

13: What other name is bank known?

Answer: Acceptance house

14: Why did majority of banks of the 1950s fail?

Answer: Lack of proper regulation and control

15: When was the Central Bank of Nigeria established?

Answer: 1959

16: Which is the first merchant bank to be established in Nigeria?

Answer: NAL Merchant Bank

17: The following are functions of Mortgage Banks except

Answer: Granting of overdraft

18: Which is not a characteristic of money?

Answer: Indivisibility

19: What does Money Aggregate measure?

Answer: Money supply

20: What are the two forms of investment identified by Keynes?

Answer: Autonomous and Induced

21: What is marginal efficiency of investment?

Answer: The rate of return expected from a given investment on a capital asset after covering all its costs, except the rate of interest

22: Negotiable instruments are often times _________instruments thatare acceptable means of payments in transactions

Answer: near cash

23: A cheque is said to be stale

Answer: when it is presented after the expiration of the date specified on it.

24: What is the concern of REGULATION J?

Answer: Cheques and funds transfer

25: In what transaction is Letter of Credit involved?

Answer: International trade and commerce

26: When was the local branch of the Institution of Bankers established in Nigeria?

Answer: 1963

27: The bottom line of the banking business is an efficient payment and

Answer: intermediary system

28: Why is the Central Bank called the apex bank?

Answer: It is empowered by law to regulate and supervise commercial banks

29: As a Banker and Lender of Last Resort to banks, the CBN performs the following functions except

Answer: Printing of bank notes

30: What other name is Merchant Bank called?

Answer: Wholesale bank

31: Bank is an outfit legally registered to accept funds and other valuables for ——–

Answer: safe keeping

32: What year was seen as an era for free banking?

Answer: 1952

33: Prior to the establishment of the Central bank of Nigeria in 1959 there was a

Answer: West African Currency Board

34: Who is charged with the responsibility of administering the Banks and Other Financial Institutions Act (BOFIA) 1991?

Answer: Central Bank of Nigeria

35: What is the designation of the Chief Executive Officer of the Central Bank of Nigeria?

Answer: Governor

36: Accepting deposit is one of the primary functions of which organization?

Answer: Commercial banks

37: What determines the difference between loans and advances?

Answer: Tenor

38: Merchant banks are usually defined in terms of their ————–

Answer: functions

39: The functions of these specialized banking institutions vary according to their ————–

Answer: types

40: The ownership structure of the community banks is shared among how many groups?

Answer: three

41: Which is not a specialized bank?

Answer: Commercial bank

42: From this Economics stand point, for money to be generally acceptable, it must backed up by the ———.

Answer: institutional force of law

43: Which other way can you express money as a measure of value?

Answer: Units of accounts

44: What is the common name for these concepts? Treasury bills, Treasury certificates, Commercial paper, Call money, Certificates of deposit, Bankers Unit Fund, Eligible Development Stock, Interbank Market, Negotiable Certificate of Deposit?

Answer: Financial instruments

45: Savings is defined as the difference between disposable income and——–

Answer: consumption

46: What another name is Merchant Bank called?

Answer: Wholesale bank

47: Which one is not a type of investment?

Answer: Annual investment

48: The Board of Directors of a bank is not involved in ————–

Answer: The day-to-day running of the bank

49: What type of instrument is a cheque?

Answer: Negotiable

50: Which is not a type of bank lending?

Answer: Composite

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