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






2. Paper currency - has no real value






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






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






5. A share of ownership in a corporation






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






7. Influence on business cycle - inflation - interest rates






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






9. What kind of movements should we pay attention to in money supply numbers?






10. 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)






11. Alters publics liquidity and influences spending through portfolio adjustment






12. 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.






13. Principal plus interest paid to lender at given maturity date






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






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






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






17. Relationship among yields of different maturities of hte same type of security.






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






19. 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.






20. Real interest rate: the real interest rate actually realized.






21. The percent of available labor force unemployed






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






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






24. 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.






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






26. Investors are concerned about the after tax return on bonds






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






28. 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.






29. Medium of exchange; unit of account; store of value; increases the liquidity in the economy






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






31. Many lead to more employment and output






32. Flow of earnings per unit of time






33. Intermediate Yields are highest






34. 2 -5 -10 year maturities






35. Instrumental in moving funds between countries






36. More than 10 year maturities






37. 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.






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






39. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






40. Comparing payoffs at different points in time






41. No interest- rate risk

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42. The relationship between yield and maturity is...






43. Allowing consumers to time their purchases better.






44. Precious Metals or another valueable commodity






45. 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.






46. Most Common






47. Praises rising at a fast and furious pace






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






49. Nominal interest rate is not adjusted for inflation.






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