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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. Producing an efficient allocation of capital - which increases production
Bd < Bs
Higher Returns
inflation
How Financial Markets promote economic efficiency
2. Yield to maturity; a measure of an interternporal price
common stock
Present Discount Value
Interest rate
Yield on a Discount Basis
3. Many lead to more employment and output
increasing money supply
Higher Returns
Not constant
Certificate of Deposit
4. Praises rising at a fast and furious pace
hyperinflation
central bank
Tbonds
Bd > Bs
5. Periods of declining aggregate output - unemployment high - investment is low.
How do regulations ensure the soundness of Financial Intermediaries?
recession
Higher Returns
T-Notes
6. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending
Downward Slopes
Real world obervations
Federal Funds Market
indirect impact
7. 30 year maturities but not since 2001
Tbonds
Banker's Acceptance
Tnotes
Flat yield curves
8. A dollar paid to you one year from now is less valueable than a dollar paid to you today
Long-run Movements
Velocity
Present Discount Value
Eurocurrency
9. The return expected over the next period on one asset relative to the alternative asset.
Expected Return
Capital Markets
M1
Present Discount Value
10. Bought at price below face value and face value repaid at maturity
Evolution of the Payment System
Foreign Bonds
hyperinflation
Discount (zero coupon) Bond
11. Nominal interest rate is not adjusted for inflation.
Interest rate
indirect impact
hyperinflation
financial markets
12. Lower excess demand and lower price will rise and interest rates will fall
Bd > Bs
banks and money supply
Hs a greater upward shift
Regulations increase information available to investors which does what?
13. One to Ten year maturities which fund long-term capital investments
Wealth
recession
Tnotes
Intermediate-term Maturity (Capital Market)
14. Anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept
Money (money supply)
Eurocurrency Market
Why Revisions are issued to money data
Corporate Bond Default risk
15. Financial instruments whose return is based on the underlying returns on mortgage loans.
unemployment rate
The Preferred Habitat Approach
Mortgage-Backed Securities
Hs a greater upward shift
16. Lower excess supply and lower price will fall and interest rates will rise
Hs a greater upward shift
Ex Post
role of money
Bd < Bs
17. 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.
Money (money supply)
Higher Returns
Real Interest Rate
central bank
18. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits
Bd < Bs
Keynesian Model
M1
Interest rate
19. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period
inflation
Regulations increase information available to investors which does what?
Velocity
Flat yield curves
20. Lower the equilibrium price and interest rate.
Tbonds
central bank
Present Discount Value
Bd = Bs
21. They channel funds from savers to investors - thereby promoting economic efficiency
Forms of Commercial Papers
financial markets
Discount (zero coupon) Bond
Bd < Bs
22. Foreign currencies deposited in banks outside the home country.
financial markets
bond market (money markets)
How Financial Markets promote economic efficiency
Eurocurrency
23. If the short-term interest rates are high than the yield curve slopes?
tax structure
Forms of Commercial Papers
Downward
Bd = Bs
24. What kind of movements should we pay attention to in money supply numbers?
Income effect
easily standardized - widely accepted - divisible and not deteriorate quickly
Long-run Movements
Simple Loan
25. Alters publics liquidity and influences spending through portfolio adjustment
central bank
increases in money supply causes
Eurocurrency Market
tax structure
26. The interest rate at which private depository institutions lend balances to other depository institutions usually over night
federal funds rate
banks and money supply
T-Bills
foreign exchange market
27. For a commodity to function efficiently as money it must be...
Why returns are more volatile for Long-Term bonds
foreign exchange market
easily standardized - widely accepted - divisible and not deteriorate quickly
Not constant
28. Promotes economic efficiency by minimizing the time spent in exchanging goods and services
Medium of Exchange
Hs a greater upward shift
Why returns are more volatile for Long-Term bonds
Store of Value
29. Less than one year and service current liquidity needs
Bd < Bs
Mortgage-Backed Securities
Short-Term Maturity
Together
30. The higher the default risk means the yield curve...
How Financial Markets directly improve the well-being of consumers
Hs a greater upward shift
Flat yield curves
Income effect
31. Medium of exchange; unit of account; store of value; increases the liquidity in the economy
Bd = Bs
Short-Term Maturity
role of money
Yield Curve
32. The increase in the price of set goods and services in a given economy over a period of time - the percent change.
inflation
increases in money supply causes
Regulations increase information available to investors which does what?
Federal Funds Market
33. When interest rates are high relative to past rates - investors expect them to decline and the prices of bonds to rise in the future resulting in big capital gains. Investors would then favor long term securities which drives up price and lowers yiel
Repo
Downward
Expected Return
Real world obervations
34. Small depository institutions report infrequently and adjustments must be made for seasonal variations
Why Revisions are issued to money data
Real Interest Rate
Coupon Bond
Discount (zero coupon) Bond
35. Seller will buy back the asset at a later date and typically at a higher price. These securities are usually government securities and are used by banks and Large Corporations.
Fiat Money
who determines our money supply
Repo
Short-Term Maturity
36. Rare
Tbonds
financial markets/institutions
Downward Slopes
Expected Return
37. 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.
Slope upward
Income effect
Unit of Account
Eurocurrency
38. It determines the equilibrium interest rate in terms of the supply of land demanded for money . People store their wealth in money and bonds. If the market for money is in equilibrium (Ms=Md) then the bond markets are also in equilibrium (Bs=Bd)
Bd > Bs
How Financial Markets promote economic efficiency
Keynesian Model
T-Bills
39. 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.
Repo
Certificate of Deposit
easily standardized - widely accepted - divisible and not deteriorate quickly
Tbonds
40. 4 -13 -26 -52 week maturities. Sold at zero coupon rates
Evolution of the Payment System
Regulations increase information available to investors which does what?
When real rate is low
T-Bills
41. Real interest rate: the real interest rate actually realized.
M1
monetary policy
Long-Term Maturities (Bond Market)
Ex Post
42. It will shift it to the right.
Medium of Exchange
bond
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
Eurobond
43. Flow of earnings per unit of time
Income
Coupon Bond
Bd < Bs
Commodity Money
44. Yield curves most always...
direct impact
Slope upward
Term Structure
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.
Upward Slops
T-Bills
Foreign Bonds
recession
46. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.
Eurobond
Store of Value
Eurocurrency Market
foreign exchange market
47. Intermediate Yields are highest
Term structure theory
monetary policy
Capital Markets
Humped Yield Curves
48. 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.
Kind of risk for a bond that's maturity equals the holding period
Long-run Movements
The Expectation Approach
Velocity
49. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money
Why returns are more volatile for Long-Term bonds
Store of Value
Evolution of the Payment System
Yield on a Discount Basis
50. Long-Term debt instruments of Corporations which are held 2-30 years. These securities have excellent credit ratings and pay interest two times a year and pay at maturity. These can be redeemed for shares of stock.
Fixed Payment-Loan
Intermediate-term Maturity (Capital Market)
easily standardized - widely accepted - divisible and not deteriorate quickly
Corporate Bonds