SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
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. The relationship between yield and maturity is...
When real rate is low
Money (money supply)
Bd = Bs
Not constant
2. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending
Flat yield curves
indirect impact
Humped Yield Curves
Ex Ante
3. Most Common
financial markets
tax structure
Foreign Bonds
Upward Slops
4. 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)
Money Market
Fiat Money
Supply and Demand for Bonds
Keynesian Model
5. The increase in the price of set goods and services in a given economy over a period of time - the percent change.
Fixed Payment-Loan
Term Structure
Store of Value
inflation
6. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.
hyperinflation
Eurocurrency Market
bond
Downward
7. How interest rates on bonds of different maturities move over time
Use present value calculations
The Liquidity Premium Modification
Humped Yield Curves
Together
8. Producing an efficient allocation of capital - which increases production
How Financial Markets promote economic efficiency
When real rate is low
Federal Funds Market
Bd = Bs
9. Promotes economic efficiency by minimizing the time spent in exchanging goods and services
Flat yield curves
Medium of Exchange
Forms of Commercial Papers
Downward Slopes
10. Anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept
Money (money supply)
Commodity Money
T-Bills
Real world obervations
11. Higher default risk compared to municipal Bonds
Regulations increase information available to investors which does what?
Corporate Bond Default risk
How do regulations ensure the soundness of Financial Intermediaries?
Risk
12. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits
federal funds rate
M1
Interest rate
Interest rate
13. Lower Incentive to borrow but a greater incentive to lend.
When real rate is high
Eurocurrency Market
Eurocurrency
Term structure theory
14. Relationship among yields of different maturities of hte same type of security.
Foreign Bonds
Term Structure
Term structure theory
Commodity Money
15. Fixed payment (incorporating part of the principal and interest payment) paid over a period of time
OTC
Why Revisions are issued to money data
Unit of Account
Fixed Payment-Loan
16. Lower excess demand and lower price will rise and interest rates will fall
increasing money supply
Yield to Maturity for simple loans
Bd > Bs
Store of Value
17. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period
Velocity
The Preferred Habitat Approach
indirect impact
direct impact
18. Rare
interest rate
Evolution of the Payment System
Downward Slopes
M1
19. More than 10 year maturities
Long-Term Maturities (Bond Market)
Downward Slopes
Regulations increase information available to investors which does what?
Evolution of the Payment System
20. 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.
Supply and Demand for Bonds
Why Revisions are issued to money data
Why returns are more volatile for Long-Term bonds
Term Structure
21. What kind of movements should we pay attention to in money supply numbers?
Upward Slops
Higher Returns
Long-run Movements
Interest rate
22. A dollar paid to you one year from now is less valueable than a dollar paid to you today
Present Discount Value
Kind of risk for a bond that's maturity equals the holding period
How do regulations ensure the soundness of Financial Intermediaries?
Simple Loan
23. Precious Metals or another valueable commodity
Tbonds
Commodity Money
who determines our money supply
Short-Term Maturity
24. Praises rising at a fast and furious pace
When real rate is high
Ex Post
hyperinflation
Velocity
25. The upward and downward movement of aggregate output produced in the economy.
Present Discount Value
Wealth
Simple Loan
business cycle
26. 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.
Corporate Bonds
Hs a greater upward shift
Simple Loan
Expected Return
27. Bought at price below face value and face value repaid at maturity
OTC
Discount (zero coupon) Bond
Bd < Bs
The Preferred Habitat Approach
28. They channel funds from savers to investors - thereby promoting economic efficiency
financial markets
bond market (money markets)
Not constant
increasing money supply
29. If the short-term interest rates are high than the yield curve slopes?
Term Structure
Downward
Why Revisions are issued to money data
Medium of Exchange
30. Long-Term Debt and Equity Instruments
Fixed Payment-Loan
Keynesian Model
When real rate is high
Capital Markets
31. Alters publics liquidity and influences spending through portfolio adjustment
Use present value calculations
monetary policy
increases in money supply causes
Real world obervations
32. A share of ownership in a corporation
hyperinflation
common stock
financial markets/institutions
Use present value calculations
33. They have a higher interest-rate risk.
Ex Ante
inflation
Why returns are more volatile for Long-Term bonds
who determines our money supply
34. Reduces adverse selection - moral hazard - and insider trading.
Repo
Regulations increase information available to investors which does what?
Evolution of the Payment System
Long-Term Maturities (Bond Market)
35. Yield curves most always...
Evolution of the Payment System
Slope upward
interest rate
common stock
36. If short-term interest rates are low than the yield curve slopes...
Evolution of the Payment System
Upward
Velocity
Together
37. The central bank
who determines our money supply
Real world obervations
Income effect
Function of Financial Intermediaries
38. Periods of declining aggregate output - unemployment high - investment is low.
When real rate is low
The Liquidity Premium Modification
recession
Supply and Demand for Bonds
39. Interest rate that equates today's value with present value of all future payments.
Yield to Maturity for simple loans
Wealth
Downward Slopes
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
40. 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
The Preferred Habitat Approach
Coupon Bond
T-Notes
Tbonds
41. Bringing together of buyers and sellers of financial securities to establish prices; includes banks - savings and loans - credit unions - investment banks - and brokers - mutual funds - and bond markets.
Fiat Money
bond market (money markets)
financial markets
financial markets/institutions
42. Allows transfer of funds from person or business without investment opportunities to one who has them - improves economic efficiency.
function of financial markets
Humped Yield Curves
central bank
Interest rate
43. Bond denominated in a currency other than that of the country in which it is sold.
Discount (zero coupon) Bond
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
Eurobond
financial markets/institutions
44. Held ten years or more. They pay semiannual dividends and return of principal at maturity.
recession
Income
T-Bonds
Real world obervations
45. Held for one- ten years.
banks and money supply
Forms of Commercial Papers
T-Notes
business cycle
46. 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.
Forms of Commercial Papers
Humped Yield Curves
Repo
Income effect
47. Sold in a foreign country and denominated in that country's currency.
Foreign Bonds
Federal Funds Market
Slope upward
Velocity
48. 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.
Real Interest Rate
Intermediate-term Maturity (Capital Market)
Risk
T-Bills
49. 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.
Downward
Corporate Bond Default risk
Fisher Effect
central bank
50. Real interest rate: the real interest rate actually realized.
Ex Ante
Ex Post
Certificate of Deposit
central bank