FBLA Banking and Financial Systems Practice Test 2025 – Comprehensive Exam Prep

The correct term that describes the processes of issuing, exchanging, loaning, and custody of money, along with the extension of credit, is banking. Banking encompasses a wide range of financial activities, including accepting deposits, facilitating transactions, providing loans, and managing assets. Banks serve as intermediaries between depositors who provide funds and borrowers who need funds, thereby playing a critical role in the economy by ensuring the flow of money.

In the context of the other options, investment typically refers to the act of allocating resources, usually money, in hopes of generating income or profit, rather than the broader spectrum of activities related to money management and credit. Finance is a broader term that involves the management of large amounts of money, particularly by governments or large companies, but does not focus specifically on the processes of issuing and handling money. Credit management specifically refers to managing the credit extended to customers and ensuring payments are made, which is a narrower focus than the overall functions described in banking.