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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 market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One
Regulations increase information available to investors which does what?
Intermediate-term Maturity (Capital Market)
Fisher Effect
Tnotes
2. Bond denominated in a currency other than that of the country in which it is sold.
Regulations increase information available to investors which does what?
Yield Curve
Eurobond
Yield to Maturity for simple loans
3. Used to save purchasing power; most liquid of all assets but loses value during inflation
Store of Value
Price vs Yields to Maturity
increasing money supply
bond market (money markets)
4. 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.
Money Market
increases in money supply causes
Simple Loan
central bank
5. Producing an efficient allocation of capital - which increases production
How Financial Markets promote economic efficiency
Real Interest Rate
Foreign Bonds
Fiat Money
6. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending
Long-Term Maturities (Bond Market)
indirect impact
Function of Financial Intermediaries
Ex Post
7. 2 -5 -10 year maturities
Federal Funds Market
Medium of Exchange
federal funds rate
Tnotes
8. 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.
Price-level effect
Supply and Demand for Bonds
Income
financial markets/institutions
9. Interest rate that equates today's value with present value of all future payments.
Price vs Yields to Maturity
Income effect
Yield to Maturity for simple loans
Fisher Effect
10. Foreign currencies deposited in banks outside the home country.
Short-Term Maturity
Eurocurrency
Real world obervations
tax structure
11. Influence on business cycle - inflation - interest rates
financial markets
Fiat Money
Eurocurrency Market
monetary policy
12. Lower excess demand and lower price will rise and interest rates will fall
Bd > Bs
Bd = Bs
Together
Upward Slops
13. Principal plus interest paid to lender at given maturity date
Yield to Maturity for simple loans
Term Structure
Simple Loan
Price-level effect
14. Held for one- ten years.
Store of Value
Tnotes
T-Notes
Fisher Effect
15. 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
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
Interest rate
Term structure theory
Store of Value
16. How interest rates on bonds of different maturities move over time
Together
Repo
M1
Long-Term Maturities (Bond Market)
17. Determines interest rates
bond market (money markets)
Banker's Acceptance
common stock
How Financial Markets promote economic efficiency
18. 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.
Tnotes
T-Bills
federal funds rate
bond market (money markets)
19. Instrumental in moving funds between countries
function of financial markets
foreign exchange market
Federal Funds Market
unemployment rate
20. Flow of earnings per unit of time
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
Eurobond
Forms of Commercial Papers
Income
21. More than 10 year maturities
increases in money supply causes
Store of Value
Long-Term Maturities (Bond Market)
indirect impact
22. Real interest rate: the real interest rate actually realized.
Unit of Account
Upward
banks and money supply
Ex Post
23. They have a higher interest-rate risk.
foreign exchange market
Why returns are more volatile for Long-Term bonds
Bd < Bs
Ex Ante
24. Pays owner of bond a fixed payment - until maturity when it pays off face par value
Income effect
Price-level effect
Bd = Bs
Coupon Bond
25. Take the form of promissory notes - drafts - checks - and CDs
Forms of Commercial Papers
Higher Returns
T-Bonds
increases in money supply causes
26. Lower Incentive to borrow but a greater incentive to lend.
When real rate is high
Foreign Bonds
Price vs Yields to Maturity
Tnotes
27. One to Ten year maturities which fund long-term capital investments
central bank
Intermediate-term Maturity (Capital Market)
Money Market
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
28. 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
Eurocurrency
Simple Loan
Interest rate
The Preferred Habitat Approach
29. Anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept
easily standardized - widely accepted - divisible and not deteriorate quickly
Money (money supply)
Kind of risk for a bond that's maturity equals the holding period
Price vs Yields to Maturity
30. Precious Metals or another valueable commodity
Yield to Maturity for simple loans
Commodity Money
function of financial markets
Ex Post
31. The higher the default risk means the yield curve...
Regulations increase information available to investors which does what?
Interest rate
Hs a greater upward shift
Short-Term Maturity
32. For a commodity to function efficiently as money it must be...
Wealth
foreign exchange market
easily standardized - widely accepted - divisible and not deteriorate quickly
Eurobond
33. Crucial role in creation of money
unemployment rate
Interest rate
banks and money supply
Eurocurrency Market
34. No interest- rate risk
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35. 30 year maturities but not since 2001
Tbonds
recession
Downward Slopes
Eurobond
36. 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.
How Financial Markets promote economic efficiency
Federal Funds Market
Upward
Certificate of Deposit
37. A share of ownership in a corporation
common stock
bond market (money markets)
Unit of Account
Money Market
38. 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.
Price-level effect
Tnotes
Supply and Demand for Bonds
Income
39. Financial instruments whose return is based on the underlying returns on mortgage loans.
Mortgage-Backed Securities
central bank
Income effect
unemployment rate
40. When bond is at par - the yield equals the coupon rate. The price and yield are negatively related. The yield greater than coupon rate when bond price is below par.
Real Interest Rate
Bd > Bs
OTC
Price vs Yields to Maturity
41. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.
Evolution of the Payment System
When real rate is high
Kind of risk for a bond that's maturity equals the holding period
Eurocurrency Market
42. Medium of exchange; unit of account; store of value; increases the liquidity in the economy
The Preferred Habitat Approach
role of money
Downward Slopes
Banker's Acceptance
43. Lower transaction costs - reduce risk - asymmetric information.
Evolution of the Payment System
Function of Financial Intermediaries
banks and money supply
Not constant
44. Investors are concerned about the after tax return on bonds
function of financial markets
tax structure
Bd > Bs
Capital Markets
45. The total collection of pieces of property that serve to store value
T-Bills
Wealth
increases in money supply causes
Corporate Bond Default risk
46. It will shift it to the right.
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
Medium of Exchange
direct impact
federal funds rate
47. Periods of declining aggregate output - unemployment high - investment is low.
Ex Post
direct impact
The Liquidity Premium Modification
recession
48. The upward and downward movement of aggregate output produced in the economy.
Corporate Bond Default risk
recession
business cycle
inflation
49. Most Common
Hs a greater upward shift
Price vs Yields to Maturity
Upward Slops
The Preferred Habitat Approach
50. A dollar paid to you one year from now is less valueable than a dollar paid to you today
Present Discount Value
direct impact
who determines our money supply
Discount (zero coupon) Bond