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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. 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.






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






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






4. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits






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






6. Most Common






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






8. Influence on business cycle - inflation - interest rates






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






12. Flow of earnings per unit of time






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






14. Instrumental in moving funds between countries






15. Long-Term Debt and Equity Instruments






16. Determines interest rates






17. Comparing payoffs at different points in time






18. Short-Term Debt Instruments






19. Crucial role in creation of money






20. Paper currency - has no real value






21. More than 10 year maturities






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






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






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






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






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






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






28. 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.






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






30. Higher default risk compared to municipal Bonds






31. 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.






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






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






34. Sold in a foreign country and denominated in that country's currency.






35. Lower excess supply and lower price will fall and interest rates will rise






36. Less than one year and service current liquidity needs






37. No interest- rate risk

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38. 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.






39. 2 -5 -10 year maturities






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






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






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






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






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






45. Greater incentive to borrow and less to lend.






46. The percent of available labor force unemployed






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






48. Nominal interest rate is not adjusted for inflation.






49. It will shift it to the right.






50. 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.