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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. Lower the equilibrium price and interest rate.






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






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






4. The central bank






5. 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.






6. Comparing payoffs at different points in time






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






8. A share of ownership in a corporation






9. 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.






10. More than 10 year maturities






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






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






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






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






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






16. Alters publics liquidity and influences spending through portfolio adjustment






17. Paper currency - has no real value






18. Short-Term Debt Instruments






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






20. Intermediate Yields are highest






21. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending






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






23. 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






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






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






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






27. Instrumental in moving funds between countries






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






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






30. Producing an efficient allocation of capital - which increases production






31. Flow of earnings per unit of time






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






33. They have a higher interest-rate risk.






34. Long-Term Debt and Equity Instruments






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






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






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






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






39. It will shift it to the right.






40. Yield curves most always...






41. 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






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






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






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






45. No interest- rate risk


46. Most Common






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






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






49. 2 -5 -10 year maturities






50. Determines interest rates