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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. Sold in a foreign country and denominated in that country's currency.






2. Most Common






3. Influence on business cycle - inflation - interest rates






4. Interest rate that equates today's value with present value of all future payments.






5. 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.






6. The central bank






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






8. 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.






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






10. Bought at price below face value and face value repaid at maturity






11. How interest rates on bonds of different maturities move over time






12. 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






13. Comparing payoffs at different points in time






14. Instrumental in moving funds between countries






15. Alters publics liquidity and influences spending through portfolio adjustment






16. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.






17. Periods of declining aggregate output - unemployment high - investment is low.






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






19. Nominal interest rate is not adjusted for inflation.






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






21. Higher default risk compared to municipal Bonds






22. 2 -5 -10 year maturities






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






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






25. One to Ten year maturities which fund long-term capital investments






26. Excess liquidity is spent on goods and services






27. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.






28. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






29. More than 10 year maturities






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






31. 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.






32. A bank loan typically used by a company to finance storage or shipment of goods. This bank draft is like a check - and guarantees future payment. These securities are active in the Secondary Market

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






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






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






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






37. Lower excess supply and lower price will fall and interest rates will rise






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






39. 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.






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






41. Rare






42. 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.






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






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






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






46. Precious Metals or another valueable commodity






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






48. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.






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.






50. 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)