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Test your basic knowledge |
DSST Money And Banking
Start Test
Study First
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. A dollar paid to you one year from now is less valueable than a dollar paid to you today
Upward Slops
Present Discount Value
Capital Markets
Forms of Commercial Papers
2. Yield curves most always...
How do regulations ensure the soundness of Financial Intermediaries?
Yield Curve
Why returns are more volatile for Long-Term bonds
Slope upward
3. 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.
Federal Funds Market
Interest rate
Term structure theory
Discount (zero coupon) Bond
4. The total collection of pieces of property that serve to store value
inflation
Wealth
Together
Bd < Bs
5. Precious Metals or another valueable commodity
Upward
Commodity Money
Federal Funds Market
monetary policy
6. Excess liquidity is spent on goods and services
banks and money supply
direct impact
increasing money supply
Mortgage-Backed Securities
7. Lower the equilibrium price and interest rate.
bond market (money markets)
Bd < Bs
unemployment rate
Bd = Bs
8. No interest- rate risk
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9. The degree of uncertainty associated with the return on one asset relative to alternative assets.
Risk
Slope upward
Short-Term Maturity
Foreign Bonds
10. Many lead to more employment and output
increasing money supply
Expected Return
indirect impact
The Liquidity Premium Modification
11. Higher default risk compared to municipal Bonds
Corporate Bond Default risk
Regulations increase information available to investors which does what?
who determines our money supply
Together
12. If the short-term interest rates are high than the yield curve slopes?
The Liquidity Premium Modification
Ex Post
The Preferred Habitat Approach
Downward
13. The relationship between yield and maturity is...
T-Bonds
T-Bills
Income
Not constant
14. The upward and downward movement of aggregate output produced in the economy.
Discount (zero coupon) Bond
business cycle
Keynesian Model
Supply and Demand for Bonds
15. What kind of movements should we pay attention to in money supply numbers?
Certificate of Deposit
increases in money supply causes
Long-run Movements
Price-level effect
16. For a commodity to function efficiently as money it must be...
Forms of Commercial Papers
Humped Yield Curves
Price-level effect
easily standardized - widely accepted - divisible and not deteriorate quickly
17. Anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept
Money (money supply)
Term structure theory
Income
Function of Financial Intermediaries
18. Less than one year and service current liquidity needs
Corporate Bond Default risk
Short-Term Maturity
Store of Value
Slope upward
19. It will shift it to the right.
Income
Higher Returns
Real Interest Rate
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
20. Influence on business cycle - inflation - interest rates
Keynesian Model
monetary policy
M1
common stock
21. Periods of declining aggregate output - unemployment high - investment is low.
Coupon Bond
Federal Funds Market
Downward
recession
22. 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.
T-Notes
inflation
Income effect
increasing money supply
23. One to Ten year maturities which fund long-term capital investments
Intermediate-term Maturity (Capital Market)
Why Revisions are issued to money data
Slope upward
Corporate Bond Default risk
24. The central bank
who determines our money supply
Certificate of Deposit
Wealth
OTC
25. 2 -5 -10 year maturities
Downward
Tnotes
Bd > Bs
How Financial Markets directly improve the well-being of consumers
26. Pays owner of bond a fixed payment - until maturity when it pays off face par value
Coupon Bond
OTC
hyperinflation
Yield Curve
27. Long-Term Debt and Equity Instruments
Capital Markets
Short-Term Maturity
How Financial Markets directly improve the well-being of consumers
Velocity
28. Lower excess demand and lower price will rise and interest rates will fall
Banker's Acceptance
Bd > Bs
Interest rate
increases in money supply causes
29. A debt security that promises to make payments periodically for a specified period of time.
Term structure theory
Eurobond
bond
Intermediate-term Maturity (Capital Market)
30. 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
Tnotes
Real world obervations
Money (money supply)
Real Interest Rate
31. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.
interest rate
Hs a greater upward shift
increasing money supply
Mortgage-Backed Securities
32. They channel funds from savers to investors - thereby promoting economic efficiency
Regulations increase information available to investors which does what?
financial markets
Real world obervations
Keynesian Model
33. Comparing payoffs at different points in time
Term structure theory
Use present value calculations
Eurocurrency Market
Corporate Bonds
34. Lower excess supply and lower price will fall and interest rates will rise
Why returns are more volatile for Long-Term bonds
Bd < Bs
Eurocurrency
Downward Slopes
35. How interest rates on bonds of different maturities move over time
easily standardized - widely accepted - divisible and not deteriorate quickly
business cycle
Together
central bank
36. Held ten years or more. They pay semiannual dividends and return of principal at maturity.
Regulations increase information available to investors which does what?
OTC
Downward Slopes
T-Bonds
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.
T-Bills
Real Interest Rate
Medium of Exchange
foreign exchange market
38. Take the form of promissory notes - drafts - checks - and CDs
Term Structure
Expected Return
OTC
Forms of Commercial Papers
39. Foreign currencies deposited in banks outside the home country.
Eurocurrency
Real Interest Rate
federal funds rate
Intermediate-term Maturity (Capital Market)
40. Nominal interest rate is not adjusted for inflation.
Interest rate
Federal Funds Market
Present Discount Value
Forms of Commercial Papers
41. Greater incentive to borrow and less to lend.
bond market (money markets)
Risk
When real rate is low
who determines our money supply
42. Reduces adverse selection - moral hazard - and insider trading.
banks and money supply
Certificate of Deposit
Why Revisions are issued to money data
Regulations increase information available to investors which does what?
43. If short-term interest rates are low than the yield curve slopes...
role of money
Upward
Higher Returns
Discount (zero coupon) Bond
44. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period
Risk
Income
Velocity
Real Interest Rate
45. Allows transfer of funds from person or business without investment opportunities to one who has them - improves economic efficiency.
banks and money supply
function of financial markets
T-Bonds
Simple Loan
46. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.
Yield Curve
Not constant
Interest rate
Yield to Maturity for simple loans
47. Restrictions on Entry - Restrictions on Assets and Activities - Disclosure - Deposit Insurance - Limits on competition - and restriction on interest rates.
Interest rate
How do regulations ensure the soundness of Financial Intermediaries?
Coupon Bond
Fiat Money
48. A share of ownership in a corporation
Money (money supply)
common stock
Fixed Payment-Loan
Fisher Effect
49. Fixed payment (incorporating part of the principal and interest payment) paid over a period of time
Fixed Payment-Loan
Short-Term Maturity
Tbonds
inflation
50. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.
T-Notes
easily standardized - widely accepted - divisible and not deteriorate quickly
Banker's Acceptance
Yield on a Discount Basis