Introducing The Financial Services Industry Quiz

Comprehensive CEMAP quiz covering the structure and functions of the UK financial services industry. Test your knowledge of financial intermediaries, the Bank of England, monetary policy, and different types of financial institutions.

CEMAP Topics Covered: functions of money, financial intermediation, Bank of England roles, monetary policy, mutual vs proprietary organizations, retail vs wholesale banking, credit unions, and benchmark interest rates.

This quiz is specifically designed for CEMAP students preparing for their exams and financial services professionals maintaining their industry knowledge.

CEMAP quiz, Certificate in Mortgage Advice and Practice, financial services industry, Bank of England, monetary policy, financial intermediaries, credit unions, mutual organizations, retail banking, wholesale banking

Introducing The Financial Services Industry Quiz

1. What are the two primary functions of money?

A. Medium of exchange and unit of account.
B. Store of value and taxes.
C. Credit creation and risk management.
D. Inflation control and wealth distribution.

2. What is the main role of a financial intermediary?

A. To act as a lender of last resort.
B. To facilitate transactions between surplus and deficit parties.
C. To regulate the supply of money.
D. To provide insurance services.

3. Which of the following is not one of the four elements of intermediation?

A. Geographic location.
B. Aggregation.
C. Risk transformation.
D. Tax reduction.

4. What is the primary function of the Bank of England?

A. To act as a financial ombudsman.
B. To regulate the supply of money and maintain economic stability.
C. To provide retail banking services.
D. To issue credit cards.

5. What is the key difference between a mutual organisation and a proprietary organisation?

A. Mutual organisations are owned by shareholders, while proprietary organisations are owned by members.
B. Mutual organisations are owned by members, while proprietary organisations are owned by shareholders.
C. Mutual organisations focus on profit, while proprietary organisations focus on social value.
D. Mutual organisations are regulated by the FCA, while proprietary organisations are not.

6. What is the primary purpose of a credit union?

A. To provide high-risk investment opportunities.
B. To offer savings and loans to members at reasonable rates.
C. To act as a wholesale bank for large corporations.
D. To issue government bonds.

7. What is the main distinction between retail and wholesale banking?

A. Retail banking serves individuals and small businesses, while wholesale banking serves large corporations and financial institutions.
B. Retail banking focuses on high-risk investments, while wholesale banking focuses on low-risk deposits.
C. Retail banking is regulated by the FCA, while wholesale banking is regulated by the Bank of England.
D. Retail banking operates internationally, while wholesale banking operates domestically.

8. What is Sonia?

A. A type of cryptocurrency.
B. A benchmark interest rate based on overnight sterling transactions.
C. A regulatory body for financial institutions.
D. A type of government bond.

9. What is the primary role of the Monetary Policy Committee (MPC) of the Bank of England?

A. To regulate credit unions.
B. To set the base interest rate to meet the government’s inflation target.
C. To manage the UK’s foreign exchange reserves.
D. To oversee the issuance of banknotes.

10. What is the legal maximum interest rate that credit unions can charge on loans?

A. 1% of the reducing balance per month.
B. 3% of the reducing balance per month.
C. 5% of the reducing balance per month.
D. 10% of the reducing balance per month.

Overcome Mortgages is a trading name of CS Financial Group Limited, registered in England and Wales. Registered address: 10/12 Woolpack Yard, Kendal, LA9 4NG. Company Registration Number: 10731629. CS Financial Group Limited is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority

The information on this website is for the use of residents of the United Kingdom only. No representations are made as to whether the information is applicable or available in any other country which may have access to it.

Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it

Some Buy-to-Let mortgages are not regulated by the Financial Conduct Authority