Test your basic knowledge |

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






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






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






4. No interest- rate risk

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


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






6. 30 year maturities but not since 2001






7. Paper currency - has no real value






8. It will shift it to the right.






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






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






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






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






13. Lower the equilibrium price and interest rate.






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. Principal plus interest paid to lender at given maturity date






16. 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.






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






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






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






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






21. 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.






22. Influence on business cycle - inflation - interest rates






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






24. Negotiable in secondary market and can also be resold in the secondary market. Minimum purchase of $100 -000 but the minimum in the secondary market is $2 -000 -000.






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






26. Used to measure value in the economy






27. 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






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






29. Yields similar for all maturities






30. 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






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






32. A share of ownership in a corporation






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






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






35. 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.






36. Short-Term securities are very good substitutes for each other within investor's portfolios who collectively impact the market. There aren't separate markets for short-term and long-term securities - there is one single market.






37. Most Common






38. Crucial role in creation of money






39. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






40. Seller will buy back the asset at a later date and typically at a higher price. These securities are usually government securities and are used by banks and Large Corporations.






41. 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.






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






43. Greater incentive to borrow and less to lend.






44. 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.






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






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






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






48. Allowing consumers to time their purchases better.






49. Praises rising at a fast and furious pace






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