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






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






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






4. Less than one year and service current liquidity needs






5. Long-Term Debt and Equity Instruments






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






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






8. 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






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






10. Yield curves most always...






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






12. Intermediate Yields are highest






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






14. Nominal interest rate is not adjusted for inflation.






15. Crucial role in creation of money






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






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






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






19. 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.






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






21. Alters publics liquidity and influences spending through portfolio adjustment






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






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






24. 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






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






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






27. Allowing consumers to time their purchases better.






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






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






30. 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.






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






32. Rare






33. Greater incentive to borrow and less to lend.






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






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






36. 30 year maturities but not since 2001






37. 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.






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






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






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






41. Short-Term Debt Instruments






42. 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.






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






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






45. The central bank






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






47. It will shift it to the right.






48. 2 -5 -10 year maturities






49. Excess liquidity is spent on goods and services






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