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DSST Money And Banking

Subjects : dss, bankingt
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. One to Ten year maturities which fund long-term capital investments






2. A higher level of income causes the demand for money at each interest rate to increase and the demand curve to shift to the right.






3. Short-Term Debt Instruments






4. The higher the default risk means the yield curve...






5. Anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept






6. Lower the equilibrium price and interest rate.






7. Financial instruments whose return is based on the underlying returns on mortgage loans.






8. Lower Incentive to borrow but a greater incentive to lend.






9. Promotes economic efficiency by minimizing the time spent in exchanging goods and services






10. Many lead to more employment and output






11. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






12. What kind of movements should we pay attention to in money supply numbers?






13. The interest rate at which private depository institutions lend balances to other depository institutions usually over night






14. The relationship between yield and maturity is...






15. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.






16. Instrumental in moving funds between countries






17. Bought at price below face value and face value repaid at maturity






18. Foreign currencies deposited in banks outside the home country.






19. The market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One






20. Banks borrow from and lend to each other deposits they hold at the Fed. These are very short term and usually only held over night.






21. Pays owner of bond a fixed payment - until maturity when it pays off face par value






22. Crucial role in creation of money






23. Comparing payoffs at different points in time






24. More than 10 year maturities






25. 30 year maturities but not since 2001






26. Short-Term securities are very good substitutes for each other within investor's portfolios who collectively impact the market. There aren't separate markets for short-term and long-term securities - there is one single market.






27. 3 -6 -12 month securities with no explicit one payment and is sold at a discount. These securities are highly liquid - and can be traded in the secondary market. These are some of the safest securities.






28. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending






29. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.






30. Lower excess supply and lower price will fall and interest rates will rise






31. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.






32. 2 -5 -10 year maturities






33. Alters publics liquidity and influences spending through portfolio adjustment






34. The degree of uncertainty associated with the return on one asset relative to alternative assets.






35. Real interest rate: the real interest rate actually realized.






36. Expectations theory forms the foundation of the slope of the curve. Liquidity Premium Theory makes Long Term permanent modifications that suggests an up ward slopping curve. Over short periods - relatives supplies of securities have an impact on yiel






37. Does not deal directly with the public and responsible for executing of the national monetary policy; implements policy by altering money supply and influencing bank behavior.






38. How interest rates on bonds of different maturities move over time






39. Relationship among yields of different maturities of hte same type of security.






40. Investors are concerned about the after tax return on bonds






41. A debt security that promises to make payments periodically for a specified period of time.






42. A dollar paid to you one year from now is less valueable than a dollar paid to you today






43. Sold in a foreign country and denominated in that country's currency.






44. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.






45. Long-Term Debt and Equity Instruments






46. Held ten years or more. They pay semiannual dividends and return of principal at maturity.






47. Reduces adverse selection - moral hazard - and insider trading.






48. The total collection of pieces of property that serve to store value






49. Negotiable in secondary market and can also be resold in the secondary market. Minimum purchase of $100 -000 but the minimum in the secondary market is $2 -000 -000.






50. Flow of earnings per unit of time