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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. Yields similar for all maturities






2. Allowing consumers to time their purchases better.






3. Alters publics liquidity and influences spending through portfolio adjustment






4. A share of ownership in a corporation






5. 30 year maturities but not since 2001






6. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.






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






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






9. No interest- rate risk

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






11. What will investors expect for taking on higher default risk?






12. Higher default risk compared to municipal Bonds






13. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






16. The upward and downward movement of aggregate output produced in the economy.






17. It will shift it to the right.






18. Precious Metals or another valueable commodity






19. The over the counter market. Equity shares offered by companies that don't meet listing requirements for major stock exchanges - or choose not to be listed there - and instead are traded in decentralized markets.






20. Bond denominated in a currency other than that of the country in which it is sold.






21. 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.






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






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






24. Most Common






25. Held for one- ten years.






26. Lower transaction costs - reduce risk - asymmetric information.






27. Nominal interest rate is not adjusted for inflation.






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






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






30. Small depository institutions report infrequently and adjustments must be made for seasonal variations






31. Flow of earnings per unit of time






32. Used to measure value in the economy






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






34. Excess liquidity is spent on goods and services






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






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






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






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






39. 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






40. Praises rising at a fast and furious pace






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






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






43. The increase in the price of set goods and services in a given economy over a period of time - the percent change.






44. Intermediate Yields are highest






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






46. Crucial role in creation of money






47. Less than one year and service current liquidity needs






48. Allows transfer of funds from person or business without investment opportunities to one who has them - improves economic efficiency.






49. 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






50. Many lead to more employment and output