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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. Determines interest rates






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






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.






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






5. At lower prices (higher i) - ceteris paribus - the quantity demanded of bonds is higher- an inverse relationship ' ' the quantity supplied of bonds is lower- a positive relationship.






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






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






8. Held for one- ten years.






9. Lower the equilibrium price and interest rate.






10. Used to measure value in the economy






11. 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.






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






13. Yields similar for all maturities






14. Instrumental in moving funds between countries






15. 30 year maturities but not since 2001






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






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






18. Rare






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






20. Excess liquidity is spent on goods and services






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






22. 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.






23. It will shift it to the right.






24. Promotes economic efficiency by minimizing the time spent in exchanging goods and services






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






27. Most Common






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






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






30. 2 -5 -10 year maturities






31. The central bank






32. Supply and demand concept for different maturities will establish the specific rates for each maturity range. Changes in supply and demand can cause the rates to get out of line with expectations. However investors will drop preferred habitat if rate






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






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






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






36. 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.






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






38. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.






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






40. 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.






41. 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.






42. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits






43. Principal plus interest paid to lender at given maturity date






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






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






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






47. Higher default risk compared to municipal Bonds






48. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






50. Comparing payoffs at different points in time