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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. Used to measure value in the economy






2. Many lead to more employment and output






3. 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.






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






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






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






7. Yield curves most always...






8. The central bank






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






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






11. 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.






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






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






14. Small depository institutions report infrequently and adjustments must be made for seasonal variations






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






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






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






18. It will shift it to the right.






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






20. 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)






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






22. Real interest rate: the real interest rate people expect at the time they buy a bond or tax out a loan.






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






24. Greater incentive to borrow and less to lend.






25. 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.






26. Flow of earnings per unit of time






27. The percent of available labor force unemployed






28. 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






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






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






31. No interest- rate risk

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32. Influence on business cycle - inflation - interest rates






33. Allowing consumers to time their purchases better.






34. 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.






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






36. The interest rate at which private depository institutions lend balances to other depository institutions usually over night






37. 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.






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






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






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






41. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






44. Most Common






45. Medium of exchange; unit of account; store of value; increases the liquidity in the economy






46. 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.






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






48. Praises rising at a fast and furious pace






49. 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.






50. 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.