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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. Reduces adverse selection - moral hazard - and insider trading.






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






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






4. More than 10 year maturities






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






6. Pays owner of bond a fixed payment - until maturity when it pays off face par value






7. 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.






8. It will shift it to the right.






9. 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.






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






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






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






13. Influence on business cycle - inflation - interest rates






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






15. Lower the equilibrium price and interest rate.






16. The percent of available labor force unemployed






17. 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.






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






19. Long-Term debt instruments of Corporations which are held 2-30 years. These securities have excellent credit ratings and pay interest two times a year and pay at maturity. These can be redeemed for shares of stock.






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






21. Many lead to more employment and output






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






23. 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






24. 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.






25. Instrumental in moving funds between countries






26. 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






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






28. Determines interest rates






29. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






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






33. A share of ownership in a corporation






34. 30 year maturities but not since 2001






35. The market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One






36. Less than one year and service current liquidity needs






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






38. Precious Metals or another valueable commodity






39. 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.






40. 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.






41. Long-Term Debt and Equity Instruments






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






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






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






45. Most Common






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






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






48. 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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49. No interest- rate risk

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