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






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






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






4. The percent of available labor force unemployed






5. 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.






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






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






8. 30 year maturities but not since 2001






9. Alters publics liquidity and influences spending through portfolio adjustment






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






11. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






12. 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.






13. Less than one year and service current liquidity needs






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. The central bank






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






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






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






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






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






21. Promotes economic efficiency by minimizing the time spent in exchanging goods and services






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






23. Flow of earnings per unit of time






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






25. 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.






26. Short-Term Debt Instruments






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






28. 2 -5 -10 year maturities






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






30. 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






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






32. Paper currency - has no real value






33. Precious Metals or another valueable commodity






34. It will shift it to the right.






35. Investors are concerned about the after tax return on bonds






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






37. Crucial role in creation of money






38. 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.






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






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






41. Excess liquidity is spent on goods and services






42. Comparing payoffs at different points in time






43. Determines interest rates






44. More than 10 year maturities






45. Influence on business cycle - inflation - interest rates






46. 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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47. Reduces adverse selection - moral hazard - and insider trading.






48. Nominal interest rate is not adjusted for inflation.






49. They have a higher interest-rate risk.






50. Greater incentive to borrow and less to lend.