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






2. 30 year maturities but not since 2001






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






4. Nominal interest rate is not adjusted for inflation.






5. 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.






6. Yield curves most always...






7. Alters publics liquidity and influences spending through portfolio adjustment






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






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






10. Influence on business cycle - inflation - interest rates






11. Long-Term Debt and Equity Instruments






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






13. Allowing consumers to time their purchases better.






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






15. The interest rate at which private depository institutions lend balances to other depository institutions usually over night






16. Instrumental in moving funds between countries






17. Flow of earnings per unit of time






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






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






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






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






23. Paper currency - has no real value






24. 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.






25. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.






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






27. Most Common






28. 2 -5 -10 year maturities






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






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






31. Held for one- ten years.






32. The central bank






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






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






35. 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.






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






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






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






39. 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






40. 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.






41. The upward and downward movement of aggregate output produced in the economy.






42. 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.






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






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






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






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






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






48. Intermediate Yields are highest






49. 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.






50. It will shift it to the right.