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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. 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.






2. Greater incentive to borrow and less to lend.






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






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






5. 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.






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






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






8. Determines interest rates






9. 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.






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






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






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






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






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






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






16. 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.






17. 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.






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






19. The percent of available labor force unemployed






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






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






22. Yield curves most always...






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






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






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






26. Less than one year and service current liquidity needs






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






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






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






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






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






32. 30 year maturities but not since 2001






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






35. Used to measure value in the economy






36. The higher the default risk means the yield curve...






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






38. They have a higher interest-rate risk.






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






40. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






41. Held for one- ten years.






42. Allowing consumers to time their purchases better.






43. More than 10 year maturities






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






45. 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.






46. Flow of earnings per unit of time






47. Lower transaction costs - reduce risk - asymmetric information.






48. 2 -5 -10 year maturities






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






50. A share of ownership in a corporation