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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. Crucial role in creation of money






2. The percent of available labor force unemployed






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






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






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






6. Nominal interest rate is not adjusted for inflation.






7. Short-Term securities are very good substitutes for each other within investor's portfolios who collectively impact the market. There aren't separate markets for short-term and long-term securities - there is one single market.






8. Yields similar for all maturities






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






10. Allowing consumers to time their purchases better.






11. No interest- rate risk

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






13. 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






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 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.






16. Long-Term Debt and Equity Instruments






17. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






20. They have a higher interest-rate risk.






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






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






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






24. It will shift it to the right.






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






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






27. 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.






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






29. 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.






30. 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.






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






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






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






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






35. Influence on business cycle - inflation - interest rates






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






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






38. 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.






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






40. Praises rising at a fast and furious pace






41. Instrumental in moving funds between countries






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






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






44. Comparing payoffs at different points in time






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. 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.






47. 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






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






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






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