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






2. Long-Term Debt and Equity Instruments






3. 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






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






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






6. Real interest rate: the real interest rate people expect at the time they buy a bond or tax out a loan.






7. 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.






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






9. For a commodity to function efficiently as money it must be...






10. Influence on business cycle - inflation - interest rates






11. If the short-term interest rates are high than the yield curve slopes?






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






13. Medium of exchange; unit of account; store of value; increases the liquidity in the economy






14. Restrictions on Entry - Restrictions on Assets and Activities - Disclosure - Deposit Insurance - Limits on competition - and restriction on interest rates.






15. If short-term interest rates are low than the yield curve slopes...






16. Lower the equilibrium price and interest rate.






17. Supply and demand concept for different maturities will establish the specific rates for each maturity range. Changes in supply and demand can cause the rates to get out of line with expectations. However investors will drop preferred habitat if rate






18. Determines interest rates






19. 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.






20. Precious Metals or another valueable commodity






21. Short-Term Debt Instruments






22. Yield curves most always...






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






24. 2 -5 -10 year maturities






25. They channel funds from savers to investors - thereby promoting economic efficiency






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






27. Used to save purchasing power; most liquid of all assets but loses value during inflation






28. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits






29. A rise in the price level causes the demand for money at each interest rates to increase and the demand curve to shift to the right.






30. Crucial role in creation of money






31. Yield to maturity; a measure of an interternporal price






32. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period






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






34. Yields similar for all maturities






35. Comparing payoffs at different points in time






36. Held for one- ten years.






37. 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.






38. 30 year maturities but not since 2001






39. Praises rising at a fast and furious pace






40. 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.






41. Producing an efficient allocation of capital - which increases production






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






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






44. Fixed payment (incorporating part of the principal and interest payment) paid over a period of time






45. No interest- rate risk

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






47. Intermediate Yields are highest






48. Prices of Long-Term securities are more volatile possibly suffer Capital Loss if owner needs to sell security prior to maturity. Prefer to hold Short-term securities for liquidity. Suggests Long term rates will always be higher than short term.






49. Rare






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






Can you answer 50 questions in 15 minutes?



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