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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. Real interest rate: the real interest rate actually realized.






2. Praises rising at a fast and furious pace






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






4. Short-Term Debt Instruments






5. 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.






6. Less than one year and service current liquidity needs






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






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






9. Alters publics liquidity and influences spending through portfolio adjustment






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






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






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






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






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






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






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






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






18. Held for one- ten years.






19. More than 10 year maturities






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






21. 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

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22. Many lead to more employment and output






23. 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.






24. Yield curves most always...






25. 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.






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






27. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






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






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






32. Allowing consumers to time their purchases better.






33. 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.






34. They have a higher interest-rate risk.






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






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






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






38. A share of ownership in a corporation






39. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.






40. Most Common






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






42. Rare






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






44. Long-Term Debt and Equity Instruments






45. 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.






46. Greater incentive to borrow and less to lend.






47. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.






48. Paper currency - has no real value






49. The percent of available labor force unemployed






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







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