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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. Excess liquidity is spent on goods and services






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






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






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






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






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






7. 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






8. Lower the equilibrium price and interest rate.






9. More than 10 year maturities






10. Praises rising at a fast and furious pace






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






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






13. Prices of Long-Term securities are more volatile possibly suffer Capital Loss if owner needs to sell security prior to maturity. Prefer to hold Short-term securities for liquidity. Suggests Long term rates will always be higher than short term.






14. Yield curves most always...






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






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






17. Yields similar for all maturities






18. The higher the default risk means the yield curve...






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






20. No interest- rate risk

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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. Greater incentive to borrow and less to lend.






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






24. 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.






25. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






28. It will shift it to the right.






29. Precious Metals or another valueable commodity






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






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






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






33. 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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34. 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.






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






36. 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.






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






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






39. 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.






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






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






42. Allowing consumers to time their purchases better.






43. Alters publics liquidity and influences spending through portfolio adjustment






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






45. 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.






46. Held for one- ten years.






47. 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






48. The central bank






49. Instrumental in moving funds between countries






50. Crucial role in creation of money







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