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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. Many lead to more employment and output






2. A share of ownership in a corporation






3. Precious Metals or another valueable commodity






4. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.






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






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






7. Instrumental in moving funds between countries






8. 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.






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






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






11. Short-Term Debt Instruments






12. Paper currency - has no real value






13. Comparing payoffs at different points in time






14. Intermediate Yields are highest






15. Most Common






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






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






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






20. Nominal interest rate is not adjusted for inflation.






21. 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.






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






23. 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






24. Less than one year and service current liquidity needs






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






26. 2 -5 -10 year maturities






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






28. Higher default risk compared to municipal Bonds






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






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






31. Used to measure value in the economy






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






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






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






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






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






37. The percent of available labor force unemployed






38. Determines interest rates






39. Crucial role in creation of money






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






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






42. Held for one- ten years.






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






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






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






46. Flow of earnings per unit of time






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






48. The central bank






49. 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.






50. Yield curves most always...