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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. Nominal interest rate is not adjusted for inflation.






2. 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.






3. 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.






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






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






6. A rise in the price level causes the demand for money at each interest rates to increase and the demand curve to shift to the right.






7. The interest rate at which private depository institutions lend balances to other depository institutions usually over night






8. The over the counter market. Equity shares offered by companies that don't meet listing requirements for major stock exchanges - or choose not to be listed there - and instead are traded in decentralized markets.






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






10. Intermediate Yields are highest






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






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






13. It will shift it to the right.






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






15. Paper currency - has no real value






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






17. 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.






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






19. Rare






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






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






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






23. Most Common






24. 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.






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






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






27. Allowing consumers to time their purchases better.






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






29. They have a higher interest-rate risk.






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






31. Long-Term Debt and Equity Instruments






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






33. Yields similar for all maturities






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






35. Less than one year and service current liquidity needs






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






37. More than 10 year maturities






38. 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.






39. A share of ownership in a corporation






40. Determines interest rates






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






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






43. 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.






44. Influence on business cycle - inflation - interest rates






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






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






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






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






49. 2 -5 -10 year maturities






50. Precious Metals or another valueable commodity