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Test your basic knowledge |
DSST Money And Banking
Start Test
Study First
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. Lower transaction costs - reduce risk - asymmetric information.
Eurocurrency
Function of Financial Intermediaries
Bd > Bs
Banker's Acceptance
2. Praises rising at a fast and furious pace
hyperinflation
unemployment rate
Present Discount Value
Slope upward
3. The higher the default risk means the yield curve...
Capital Markets
Hs a greater upward shift
Commodity Money
increases in money supply causes
4. 30 year maturities but not since 2001
direct impact
Tbonds
Upward Slops
common stock
5. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period
unemployment rate
Velocity
Term Structure
Eurobond
6. 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.
Coupon Bond
Price-level effect
Fisher Effect
How Financial Markets promote economic efficiency
7. At lower prices (higher i) - ceteris paribus - the quantity demanded of bonds is higher- an inverse relationship ' ' the quantity supplied of bonds is lower- a positive relationship.
Eurobond
Present Discount Value
M1
Supply and Demand for Bonds
8. Higher default risk compared to municipal Bonds
Corporate Bond Default risk
Discount (zero coupon) Bond
Evolution of the Payment System
Yield to Maturity for simple loans
9. It will shift it to the right.
Flat yield curves
Supply and Demand for Bonds
Ex Post
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
10. Relationship among yields of different maturities of hte same type of security.
Long-run Movements
Fixed Payment-Loan
direct impact
Term Structure
11. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.
Eurocurrency Market
Use present value calculations
Upward
Corporate Bonds
12. If short-term interest rates are low than the yield curve slopes...
Not constant
Upward
increases in money supply causes
How do regulations ensure the soundness of Financial Intermediaries?
13. 4 -13 -26 -52 week maturities. Sold at zero coupon rates
recession
The Liquidity Premium Modification
Hs a greater upward shift
T-Bills
14. Instrumental in moving funds between countries
Velocity
Function of Financial Intermediaries
monetary policy
foreign exchange market
15. What will investors expect for taking on higher default risk?
Fiat Money
inflation
Higher Returns
Real world obervations
16. The upward and downward movement of aggregate output produced in the economy.
Corporate Bonds
Fisher Effect
business cycle
Bd = Bs
17. Comparing payoffs at different points in time
Use present value calculations
monetary policy
Present Discount Value
Keynesian Model
18. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.
Real Interest Rate
T-Notes
Velocity
Fixed Payment-Loan
19. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.
Higher Returns
Humped Yield Curves
Evolution of the Payment System
interest rate
20. A dollar paid to you one year from now is less valueable than a dollar paid to you today
Risk
Medium of Exchange
Present Discount Value
bond
21. They channel funds from savers to investors - thereby promoting economic efficiency
Bd = Bs
financial markets
Bd > Bs
Eurocurrency
22. Lower excess demand and lower price will rise and interest rates will fall
Price-level effect
Bd > Bs
OTC
central bank
23. Yields similar for all maturities
business cycle
T-Bills
Tnotes
Flat yield curves
24. If the short-term interest rates are high than the yield curve slopes?
Certificate of Deposit
Downward
Store of Value
Velocity
25. Many lead to more employment and output
central bank
Upward Slops
inflation
increasing money supply
26. 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.
Intermediate-term Maturity (Capital Market)
central bank
T-Bills
How do regulations ensure the soundness of Financial Intermediaries?
27. Promotes economic efficiency by minimizing the time spent in exchanging goods and services
Use present value calculations
Capital Markets
Medium of Exchange
Supply and Demand for Bonds
28. For a commodity to function efficiently as money it must be...
function of financial markets
Downward
Why returns are more volatile for Long-Term bonds
easily standardized - widely accepted - divisible and not deteriorate quickly
29. Excess liquidity is spent on goods and services
direct impact
Upward
bond
T-Bills
30. 2 -5 -10 year maturities
Tnotes
Real Interest Rate
Banker's Acceptance
role of money
31. The interest rate at which private depository institutions lend balances to other depository institutions usually over night
federal funds rate
Hs a greater upward shift
Real Interest Rate
Present Discount Value
32. Allowing consumers to time their purchases better.
T-Bills
How Financial Markets directly improve the well-being of consumers
bond market (money markets)
increasing money supply
33. Precious Metals or another valueable commodity
Commodity Money
Upward Slops
Foreign Bonds
Bd = Bs
34. Held ten years or more. They pay semiannual dividends and return of principal at maturity.
How Financial Markets promote economic efficiency
Unit of Account
T-Bonds
Interest rate
35. Real interest rate: the real interest rate people expect at the time they buy a bond or tax out a loan.
Downward
Price-level effect
increasing money supply
Ex Ante
36. 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.
Upward Slops
Real Interest Rate
The Preferred Habitat Approach
Certificate of Deposit
37. What kind of movements should we pay attention to in money supply numbers?
hyperinflation
Yield on a Discount Basis
Long-run Movements
Upward Slops
38. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.
Expected Return
Evolution of the Payment System
Yield Curve
Regulations increase information available to investors which does what?
39. The market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One
Fisher Effect
bond
Store of Value
bond market (money markets)
40. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits
financial markets/institutions
Long-run Movements
M1
interest rate
41. Medium of exchange; unit of account; store of value; increases the liquidity in the economy
increases in money supply causes
Use present value calculations
How do regulations ensure the soundness of Financial Intermediaries?
role of money
42. The relationship between yield and maturity is...
Eurocurrency
Term Structure
Banker's Acceptance
Not constant
43. The increase in the price of set goods and services in a given economy over a period of time - the percent change.
federal funds rate
inflation
Bd < Bs
foreign exchange market
44. Paper currency - has no real value
T-Bills
Bd = Bs
Fiat Money
Short-Term Maturity
45. 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.
direct impact
T-Bills
Intermediate-term Maturity (Capital Market)
Why returns are more volatile for Long-Term bonds
46. How interest rates on bonds of different maturities move over time
Together
increases in money supply causes
common stock
Eurocurrency
47. The central bank
The Liquidity Premium Modification
Fiat Money
who determines our money supply
OTC
48. Pays owner of bond a fixed payment - until maturity when it pays off face par value
Downward Slopes
Coupon Bond
When real rate is low
Fixed Payment-Loan
49. Fixed payment (incorporating part of the principal and interest payment) paid over a period of time
Fixed Payment-Loan
tax structure
Forms of Commercial Papers
Why Revisions are issued to money data
50. One to Ten year maturities which fund long-term capital investments
Foreign Bonds
Present Discount Value
Intermediate-term Maturity (Capital Market)
Keynesian Model