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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 share of ownership in a corporation






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






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






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






5. Paper currency - has no real value






6. Many lead to more employment and output






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






8. Most Common






9. 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.






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






11. 2 -5 -10 year maturities






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






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






14. 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.






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






16. Financial instruments whose return is based on the underlying returns on mortgage loans.






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






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






19. Comparing payoffs at different points in time






20. Intermediate Yields are highest






21. 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.






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






23. Greater incentive to borrow and less to lend.






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






25. It will shift it to the right.






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






27. They have a higher interest-rate risk.






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






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






30. Flow of earnings per unit of time






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






32. Higher default risk compared to municipal Bonds






33. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






34. 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)






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






36. Used to measure value in the economy






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






38. Short-Term Debt Instruments






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






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






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






42. Allowing consumers to time their purchases better.






43. 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






44. Lower the equilibrium price and interest rate.






45. 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.






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






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






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






49. Excess liquidity is spent on goods and services






50. 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.