Test 7 - Blockchain Technology

What is blockchain technology?

• 1. A type of digital currency used for financial transactions.

• 1. A distributed ledger that records transactions across multiple computers.

• 1. A centralized database used by banks for secure data storage.

• 1. A financial institution focused on cryptocurrency trading.

How does blockchain provide security in financial transactions?

• 1. By using encryption techniques to protect data.

• 1. By requiring physical verification of transactions.

• 1. By eliminating the need for user authentication.

• 1. By relying on centralized authorities for transaction validation.

What is the main advantage of blockchain in financial transactions?

• Instantaneous transaction speed.

• Decreased transparency and auditability.

• Enhanced security and immutability of records.

• Lower transaction costs compared to traditional methods.

Which financial sector has adopted blockchain technology for cross-border payments?

•  Insurance

• Stock trading

• Remittance

• Credit card processing

How does blockchain enable faster and more efficient settlement of securities?

• 1. By removing the need for clearinghouses and intermediaries.

• 1. By introducing complex settlement algorithms.

• 1. By increasing the number of manual processes involved.

• 1. By relying on traditional paper-based documentation.

What is a smart contract in the context of blockchain?

• A legally binding agreement between two parties.

• A program that executes predefined actions when specified conditions are met.

• A software tool used for mining cryptocurrencies.

• A digital wallet for storing blockchain-based assets.

How does blockchain address the issue of trust in financial transactions?

• 1. By relying on centralized intermediaries for transaction validation.

• 1. By using advanced encryption techniques for data protection.

• 1. By providing a transparent and decentralized ledger for verification.

• 1. By eliminating the need for user authentication.

What is the potential impact of blockchain on reducing fraud in the financial industry?

• 1. Increased vulnerability to cyberattacks and hacking.

• 1. Improved traceability and transparency of transactions.

• 1. Limited access to financial services for individuals.

• 1. Slower transaction processing times.