Paper 2 · merchant banks
Which of the following is a function of a merchant bank?
AKeeping the savings accounts of individuals in small rural branches
BProviding medium and long-term finance and advice to business enterprises
CSupervising the trading of company shares on the national stock exchange floor
DIssuing the national currency and setting the country's interest rate
Explanation: Merchant banks deal with businesses rather than with the general public. They lend for expansion, underwrite share issues, advise on mergers and takeovers and finance international trade. Issuing currency and setting the interest rate are central bank functions, ordinary savings accounts are commercial bank business, and supervising share trading belongs to the stock exchange and its regulator.
Derived from ZIMSEC Business Enterprise Skills Paper 2, Nov 2021, Q1