Test: Financial Institutions - 2 - JAMB MCQ

The money market is primarily responsible for facilitating the buying and selling of short-term securities. It deals with instruments such as Treasury bills, commercial paper, and certificates of deposit, which have shorter maturities.

Corporate bonds are an example of a capital market instrument. Capital market instruments are long-term securities that are used to raise capital for businesses and governments.

The Securities and Exchange Commission (SEC) is responsible for overseeing the Nigerian capital market. The SEC regulates and develops the capital market to ensure its fairness, efficiency, and transparency.

The primary objective of the Securities and Exchange Commission (SEC) is to regulate and develop the Nigerian capital market. The SEC aims to protect investors, ensure fair market practices, and promote capital market growth.

The Central Bank of Nigeria (CBN) is responsible for ensuring the stability of the Nigerian banking system. The CBN formulates and implements monetary policies, regulates commercial banks, and maintains financial system stability.

The Central Bank of Nigeria (CBN) regulates and supervises commercial banks in the financial sector. It sets monetary policy, manages the country's foreign reserves, and maintains the stability of the banking system.

Deposit money banks primarily function to safeguard customers' deposits. They accept deposits from individuals and businesses, provide loans, and offer a range of banking services.

The process of money creation by deposit money banks is called fractional reserve banking. It involves banks holding a fraction of their customers' deposits as cash reserves while lending out the remaining funds.

The term "reserve requirement" refers to the percentage of deposits that banks must hold as cash reserves. It is set by the Central Bank to ensure the stability of the banking system.

The money creation process by deposit money banks carries the risk of inflationary pressures. When banks create excessive money by extending loans, it can lead to increased spending and potential inflationary pressures in the economy.