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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. 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






2. A share of ownership in a corporation






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






4. Short-Term Debt Instruments






5. Nominal interest rate is not adjusted for inflation.






6. 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.






7. Comparing payoffs at different points in time






8. Alters publics liquidity and influences spending through portfolio adjustment






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






10. 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.






11. Determines interest rates






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






13. Many lead to more employment and output






14. Excess liquidity is spent on goods and services






15. Paper currency - has no real value






16. The total collection of pieces of property that serve to store value






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






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






19. Allowing consumers to time their purchases better.






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






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






22. Greater incentive to borrow and less to lend.






23. 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.






24. It will shift it to the right.






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






26. 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.






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






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






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






30. It determines the equilibrium interest rate in terms of the supply of land demanded for money . People store their wealth in money and bonds. If the market for money is in equilibrium (Ms=Md) then the bond markets are also in equilibrium (Bs=Bd)






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






32. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






33. 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.






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






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






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






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






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






39. Lower the equilibrium price and interest rate.






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






41. Precious Metals or another valueable commodity






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






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






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






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






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






47. Flow of earnings per unit of time






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






49. No interest- rate risk

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50. 2 -5 -10 year maturities