GROUPWORK 3

Team Gorgeous

Passed to:
Mr. Gerardo Abadilla, CHE, MBA

Submitted By:
Amistoso, Adliana Colin A.
Lopez, Raynalyn
DATE: February 10, 2021
Read Chapter 3 Banking System
Answer:
Exercise 3-1                                             10 points
Matching Type
Match column A with column B. Write the letter on the space provided.

Column A Column B

A. Credit card
B. Time deposit
1. C Fractional reserve system C. Portion of deposit
2. E "and"; "or" 
3. I invest in non-allied enterprises  D. Central Bank
4. F Money supply E. Inventory custodian
5. B Fixed period
6. L Goldsmiths F. Joint account
7. H Notes
8. G Checking account G. Current account
9. A Plastic money H. Fiat money
10. D Government authority
I. Universal Bank
J. Liquidity Management
 

Exercise 3-2                                             10

Define:

1. Discounting of Bills of Exchange

- Discounting of bill refers to the encashment of the bill before the
date of its maturity.
2. Mobile banking
- Mobile banking is the act of making financial transactions on
a mobile device (cell phone, tablet, etc.).
3. Online banking
- Banking online means accessing your bank account and
carrying out financial transactions through the internet on your
smartphone, tablet or computer.
4. Private banking
- Private banking consists of personalized financial services and
products offered to the high-net-worth individual (HNWI) clients
of a retail bank or other financial institution.
5. Rural and Cooperative banks
- These banks are also differentiated from each other by
ownership; while rural banks are privately owned and
managed, cooperative banks are organized/owned
by cooperatives or federation of cooperatives.
6. Thrift Banking System
- A thrift bank–also just called a thrift–is a type of financial
institution that specializes in offering savings accounts and
originating home mortgages for consumers.
7. Central Bank
- A central bank is a financial institution that is responsible for
overseeing the monetary system and policy of a nation or group
of nations, regulating its money supply, and setting interest
rates.
8. Management of foreign currency reserves
- Reserve management is a process that ensures that adequate
official public sector foreign assets are readily available to and
controlled by the authorities for meeting a defined range of
objectives for a country or union.
9. Savings account
- A savings account is an interest-bearing deposit account held at
a bank or other financial institution.
10. Accepting deposit
- Accepting deposits is the most important function of a
commercial bank. The bank borrows money from the public by
way of accepting different kinds of deposits. 

Exercise 3-3   
Fill in the blank.

1. The goldsmith's ability to create money was based on the fact that
paper money in the form of gold receipts was rarely redeemed for gold.
2. When the receipts given by goldsmiths to depositors were used to make
purchases, . the receipts became in effect paper money.
3. The primary purpose of the legal reserve requirement is to The Fed's way of
controlling A) prevent banks from hoarding too much vault cash.
4. Most modern banking systems are based on fractional reserves.
5. The amount that a commercial bank can lend is determine by its excess
reserves.
6. A commercial bank can expand its excess reserves by demanding and
receiving payment on an overdue loan.
7. Commercial banks create money when they create check-able deposits in
exchange for IOUs.
8. Individual commercial banks are limited in their ability to create money by lending
because it will likely to result in the loss of Reserves to other banks.
9. When a commercial bank has excess reserves, it is in position to make additional
Loans.
10. Actual reserves minus required reserves equal bank’s reserves.
11. The basic reason why the commercial banking system can increase its
checkable deposits by a multiple of its excess reserves is because reserves lost by
any particular bank will be gained by some other bank.