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. 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.






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






3. Lower the equilibrium price and interest rate.






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






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






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






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






9. Nominal interest rate is not adjusted for inflation.






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. Investors are concerned about the after tax return on bonds






12. 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






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






14. The central bank






15. No interest- rate risk

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


16. Held ten years or more. They pay semiannual dividends and return of principal at maturity.






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






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






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






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






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






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






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






24. If the short-term interest rates are high than the yield curve slopes?






25. Short-Term Debt Instruments






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






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






28. Held for one- ten years.






29. Long-Term Debt and Equity Instruments






30. Instrumental in moving funds between countries






31. Allowing consumers to time their purchases better.






32. Periods of declining aggregate output - unemployment high - investment is low.






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






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






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. 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.






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






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






39. 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.






40. Lower Incentive to borrow but a greater incentive to lend.






41. 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






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






43. 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.






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






45. A bank loan typically used by a company to finance storage or shipment of goods. This bank draft is like a check - and guarantees future payment. These securities are active in the Secondary Market

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


46. 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)






47. 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.






48. What kind of movements should we pay attention to in money supply numbers?






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






50. Crucial role in creation of money