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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. Principal plus interest paid to lender at given maturity date






2. 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.






3. 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.






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






5. 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.






6. Nominal interest rate is not adjusted for inflation.






7. A share of ownership in a corporation






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






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






10. Restrictions on Entry - Restrictions on Assets and Activities - Disclosure - Deposit Insurance - Limits on competition - and restriction on interest rates.






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






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






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






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






15. Precious Metals or another valueable commodity






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






17. Lower excess demand and lower price will rise and interest rates will fall






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






19. 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.






20. Most Common






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






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






23. 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.






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






25. Crucial role in creation of money






26. Used to measure value in the economy






27. 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)






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






29. 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.






30. Alters publics liquidity and influences spending through portfolio adjustment






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






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






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






34. Short-Term Debt Instruments






35. Lower the equilibrium price and interest rate.






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






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






38. Intermediate Yields are highest






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






40. Comparing payoffs at different points in time






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






42. The central bank






43. 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






44. Yields similar for all maturities






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






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






47. Less than one year and service current liquidity needs






48. They have a higher interest-rate risk.






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






50. The percent of available labor force unemployed