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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. 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.






2. 30 year maturities but not since 2001






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






4. 2 -5 -10 year maturities






5. Periods of declining aggregate output - unemployment high - investment is low.






6. A share of ownership in a corporation






7. Higher default risk compared to municipal Bonds






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






9. More than 10 year maturities






10. Yields similar for all maturities






11. Praises rising at a fast and furious pace






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






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






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






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






16. Lower the equilibrium price and interest rate.






17. 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.






18. Nominal interest rate is not adjusted for inflation.






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






20. 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






21. It will shift it to the right.






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






23. Yield curves most always...






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






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






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






27. Lower transaction costs - reduce risk - asymmetric information.






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






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






30. 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.






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






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






33. Held for one- ten years.






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






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






36. 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.






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






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






39. Paper currency - has no real value






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






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






42. A debt security that promises to make payments periodically for a specified period of time.






43. The percent of available labor force unemployed






44. Take the form of promissory notes - drafts - checks - and CDs






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






46. Influence on business cycle - inflation - interest rates






47. Instrumental in moving funds between countries






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






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






50. Many lead to more employment and output







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