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DSST Money And Banking

Subjects : dss, bankingt
Instructions:
  • Answer 50 questions in 15 minutes.
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  • 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. How interest rates on bonds of different maturities move over time






2. Praises rising at a fast and furious pace






3. Bringing together of buyers and sellers of financial securities to establish prices; includes banks - savings and loans - credit unions - investment banks - and brokers - mutual funds - and bond markets.






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






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






6. Alters publics liquidity and influences spending through portfolio adjustment






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






8. It will shift it to the right.






9. 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






10. Influence on business cycle - inflation - interest rates






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






12. 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.






13. A dollar paid to you one year from now is less valueable than a dollar paid to you today






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






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






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






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






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






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






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






21. Greater incentive to borrow and less to lend.






22. The increase in the price of set goods and services in a given economy over a period of time - the percent change.






23. 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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24. Rare






25. 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.






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






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






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






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






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






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






32. It determines the equilibrium interest rate in terms of the supply of land demanded for money . People store their wealth in money and bonds. If the market for money is in equilibrium (Ms=Md) then the bond markets are also in equilibrium (Bs=Bd)






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. Allowing consumers to time their purchases better.






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






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






37. Lower the equilibrium price and interest rate.






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






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






40. Intermediate Yields are highest






41. 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.






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






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






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






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






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






47. Many lead to more employment and output






48. They have a higher interest-rate risk.






49. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






50. Relationship among yields of different maturities of hte same type of security.