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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. Flow of earnings per unit of time






2. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






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






6. 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.






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






8. Pays owner of bond a fixed payment - until maturity when it pays off face par value






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






10. 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)






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






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






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






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






15. 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






16. 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.






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






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






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






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






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






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






23. Yields similar for all maturities






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






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






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






27. They have a higher interest-rate risk.






28. More than 10 year maturities






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






30. Nominal interest rate is not adjusted for inflation.






31. Allowing consumers to time their purchases better.






32. Praises rising at a fast and furious pace






33. The percent of available labor force unemployed






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






35. Used to measure value in the economy






36. 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.






37. Crucial role in creation of money






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






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






40. Instrumental in moving funds between countries






41. Precious Metals or another valueable commodity






42. Influence on business cycle - inflation - interest rates






43. 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.






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






45. 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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46. 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.






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






48. Most Common






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






50. A rise in the price level causes the demand for money at each interest rates to increase and the demand curve to shift to the right.