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. Greater incentive to borrow and less to lend.






2. 30 year maturities but not since 2001






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






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






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






6. No interest- rate risk

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


7. 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.






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






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






10. Long-Term Debt and Equity Instruments






11. 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






12. Less than one year and service current liquidity needs






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






14. More than 10 year maturities






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






16. Crucial role in creation of money






17. 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.






18. 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.






19. Short-Term Debt Instruments






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






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






22. Intermediate Yields are highest






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






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






25. Instrumental in moving funds between countries






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






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






28. Flow of earnings per unit of time






29. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






31. The market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One






32. 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.






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






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






35. 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






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






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






38. Praises rising at a fast and furious pace






39. Higher default risk compared to municipal Bonds






40. 2 -5 -10 year maturities






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






43. Used to save purchasing power; most liquid of all assets but loses value during inflation






44. Determines interest rates






45. The central bank






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






47. 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.






48. Producing an efficient allocation of capital - which increases production






49. Nominal interest rate is not adjusted for inflation.






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