Worksheet – Chapter 8: Banks and the Magic of Finance
A. Multiple Choice Questions (MCQs)
Financial infrastructure helps people and organizations to:
a) Build roads
b) Manage and transfer money
c) Grow crops
d) Manufacture goods
Which institution regulates banks in India?
a) Parliament
b) RBI
c) Supreme Court
d) Stock Exchange
Which account usually gives a higher interest rate?
a) Savings Account
b) Current Account
c) Fixed Deposit Account
d) Salary Account
UPI stands for:
a) Universal Payment Interface
b) Unified Payment Interface
c) United Payment Interface
d) Unique Payment Interface
Which payment method uses a QR code?
a) Cheque
b) Cash
c) UPI
d) Withdrawal Slip
Which account is mainly used by businesses?
a) Savings Account
b) Current Account
c) Fixed Deposit Account
d) Joint Account
A share represents:
a) Full ownership of a company
b) Part ownership of a company
c) Loan from a bank
d) Tax payment
The stock market helps companies to:
a) Build roads
b) Raise money
c) Print currency
d) Give loans
B. Fill in the Blanks
- Banks accept __________ from customers.
- The __________ Bank of India regulates banks in India.
- UPI was launched in the year __________.
- Money deposited for a fixed period is called __________ Deposit.
- __________ interest helps money grow faster over time.
- ATM stands for __________ Teller Machine.
- The stock market is a place where people buy and sell __________.
- UPI uses a __________ for secure transactions.
C. Match the Following
Column A Column B
1. Savings Account a. Ownership in a company
2. UPI b. Long-term savings
3. Share c. Instant money transfer
4. Fixed Deposit d. Earns interest
5. RBI e. Regulates banks
D. True / False
- Banks provide loans to people and businesses. ________
- Current accounts usually give high interest. ________
- UPI allows instant money transfer. ________
- Fixed Deposits provide lower interest than savings accounts. ________
- RBI regulates banks in India. ________
- Shares represent ownership in a company. ________
- ATM can only be used during bank working hours. ________
- Digital payments reduce the need for cash. ________
E. Very Short Answer Questions
- What is financial infrastructure?
- What is a bank?
- What is a share?
- What is UPI?
- What is compound interest?
F. Short Answer Questions
- Write any three functions of banks.
- Differentiate between Savings Account and Current Account.
- What are the advantages of UPI?
- Why is financial infrastructure important?
- Mention any three safety measures against cyber fraud.
G. Long Answer Questions
- Explain the role of banks in the economy.
- Describe different payment methods used in banking.
- Explain how UPI works.
- Explain the benefits and risks of the stock market.
H. Case Study Questions
Case Study – 1
Riya received ₹5,000 on her birthday and wanted to save it for future use. Her parents advised her to open a bank account so that her money would remain safe and also earn interest. After discussing different account types, they chose an option suitable for regular savings. Riya also learned that banks provide loans and help people transfer money.
Questions:
- Which type of account is suitable for Riya?
- Why should she keep money in a bank?
- Name one benefit of keeping money in a bank.
- Mention another function of banks.
- What happens to savings over time due to interest?
Case Study – 2
Rahul visited a grocery store and bought some items. Instead of paying cash, he scanned a QR code using a mobile app and entered his UPI PIN. Within seconds, the payment was completed and both Rahul and the shopkeeper received a confirmation message.
Questions:
- Which payment system did Rahul use?
- What does UPI stand for?
- Which method was used to make payment?
- Name one advantage of UPI.
- Why is UPI considered convenient?
Case Study – 3
A company wanted to expand its business and needed money for new machines and projects. Instead of taking only loans, it issued shares in the stock market. Many people purchased these shares expecting future profits.
Questions:
- Where did the company issue shares?
- What is a share?
- Why did people buy shares?
- Name one benefit of the stock market.
- Mention one risk involved in investing in shares.
- b) Manage and transfer money
- b) RBI
- c) Fixed Deposit Account
- b) Unified Payment Interface
- c) UPI
- b) Current Account
- b) Part ownership of a company
- b) Raise money
- Banks accept deposits from customers.
- The Reserve Bank of India regulates banks in India.
- UPI was launched in the year 2016.
- Money deposited for a fixed period is called Fixed Deposit.
- Compound interest helps money grow faster over time.
- ATM stands for Automated Teller Machine.
- The stock market is a place where people buy and sell shares.
- UPI uses a PIN for secure transactions.
- Banks provide loans to people and businesses. → True
- Current accounts usually give high interest. → False
- UPI allows instant money transfer. → True
- Fixed Deposits provide lower interest than savings accounts. → False
- RBI regulates banks in India. → True
- Shares represent ownership in a company. → True
- ATM can only be used during bank working hours. → False
- Digital payments reduce the need for cash. → True
- Savings Account
- To keep money safe and earn interest
- It helps savings grow over time
- Banks provide loans/transfer money
- Savings increase due to interest
- UPI
- Unified Payments Interface
- QR code payment
- Instant money transfer
- It is fast and easy to use
- Stock Market
- A share is part ownership in a company
- To earn profit in the future
- Helps companies raise money
- Share prices may fall, causing losses
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