4.4.2 Commercial banks and investment banks

• Investment banks primarily focus on corporate and institutional clients.


  True
• The primary activity of commercial banks is accepting deposits
• Investment banks primarily serve retail customers.

  False
• Commercial banks accept deposits from individuals and businesses
• What role do commercial banks play in the economy?

  Facilitate money and credit flow
• Commercial banks earn revenue primarily from interest on loans and service fees.


  True
• Investment banks advise companies on mergers and acquisitions
• What is the revenue source for investment banks?

  Transaction fees
• Investment banks provide loans to retail consumers.

  False
• Commercial banks focus on retail and consumer banking.
• What are the primary activities of investment banks?

  Underwriting securities, M&A advisory
• Commercial banks and investment banks have the same customer base.

  False
• Investment banks engage in capital market activities such as underwriting securities and providing advisory services.
• What are the primary revenue sources for commercial banks?

  Interest on loans, service fees
• Commercial banks facilitate the flow of money and credit by accepting deposits
• Commercial banks accept deposits and make loans as their primary activities.


  True
• Commercial banks operate under highly regulated environments and offer insured deposits
• Primary functions of commercial banks

  1️⃣ Accept deposits

  2️⃣ Make loans

  3️⃣ Facilitate money and credit flow
• Investment banks assist companies in raising capital by issuing stocks and bonds
• Match the function with the bank type:

  Underwriting Securities ↔️ Investment Banks

  Accepting Deposits ↔️ Commercial Banks
• Commercial banks create money through the process of lending
• How do investment banks facilitate cross-border investments?

  Facilitating international transactions
• Commercial banks are primarily regulated to ensure deposit safety and financial stability.

  True
• Investment banks primarily serve retail consumers and businesses.

  False
• What are the primary activities of commercial banks?

  Accepting deposits, making loans
• What is the primary focus of investment banks?

  Underwriting securities, M&A, advisory
• Commercial banks focus on retail consumers and businesses, while investment banks serve corporate and institutional clients
• Investment banks are more heavily regulated than commercial banks.

  False
• Commercial banks are highly regulated to protect depositors, whereas investment banks face less stringent regulations
• What is the role of investment banks in raising capital for companies?

  Underwriting securities
• Investment banks generate revenue from interest on loans.

  False
• What are three tools used by central banks to influence commercial banks?

  Reserve requirements, discount rates, open market operations
• Compliance with monetary policy tools affects commercial banks' ability to lend.

  True
• Commercial banks are more regulated than investment banks


  True
• Investment banks provide advisory services on mergers and acquisitions
• What is the primary focus of commercial banks compared to investment banks?

  Deposits and loans
• Investment banks primarily serve corporate and institutional clients


  True
• Match the bank type with its role in international transactions:

  Investment Banks ↔️ Facilitate cross-border investments

  Commercial Banks ↔️ Process international payments
• Match the trend with its impact on commercial and investment banks:

  Digital Transformation ↔️ AI for trading and cybersecurity

  Consolidation ↔️ Mergers to expand services

  Sustainable Finance ↔️ Increased ESG bond underwriting
• Commercial banks are financial institutions that accept deposits