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






2. Yield curves most always...






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






5. Precious Metals or another valueable commodity






6. Excess liquidity is spent on goods and services






7. Lower the equilibrium price and interest rate.






8. No interest- rate risk

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


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






10. Many lead to more employment and output






11. Higher default risk compared to municipal Bonds






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






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






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






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






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






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






18. Less than one year and service current liquidity needs






19. It will shift it to the right.






20. Influence on business cycle - inflation - interest rates






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






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.






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






24. The central bank






25. 2 -5 -10 year maturities






26. Pays owner of bond a fixed payment - until maturity when it pays off face par value






27. Long-Term Debt and Equity Instruments






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






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






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






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






32. They channel funds from savers to investors - thereby promoting economic efficiency






33. Comparing payoffs at different points in time






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






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






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






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.






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






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






40. Nominal interest rate is not adjusted for inflation.






41. Greater incentive to borrow and less to lend.






42. Reduces adverse selection - moral hazard - and insider trading.






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






44. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period






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






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






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






48. A share of ownership in a corporation






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






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