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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. 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.






2. Many lead to more employment and output






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






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






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






6. The central bank






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






8. 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.






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






10. 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.






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






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






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






14. The return expected over the next period on one asset relative to the alternative asset.






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






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






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






18. It will shift it to the right.






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






20. Rare






21. Fixed payment (incorporating part of the principal and interest payment) paid over a period of time






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






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






24. Precious Metals or another valueable commodity






25. The percent of available labor force unemployed






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






27. Excess liquidity is spent on goods and services






28. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending






29. Held for one- ten years.






30. 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.






31. Flow of earnings per unit of time






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






33. 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






34. 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)






35. Long-Term Debt and Equity Instruments






36. Higher default risk compared to municipal Bonds






37. More than 10 year maturities






38. Intermediate Yields are highest






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






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






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






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






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






44. 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.






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






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






47. 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






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






49. 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.






50. Used to save purchasing power; most liquid of all assets but loses value during inflation