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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. 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.






2. 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.






3. Greater incentive to borrow and less to lend.






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






5. Precious Metals or another valueable commodity






6. Intermediate Yields are highest






7. 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.






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






9. Lower the equilibrium price and interest rate.






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






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






12. Used to measure value in the economy






13. 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.






14. Nominal interest rate is not adjusted for inflation.






15. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






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






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






20. Yield curves most always...






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






22. 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.






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






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






25. Flow of earnings per unit of time






26. 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.






27. Many lead to more employment and output






28. The percent of available labor force unemployed






29. Held for one- ten years.






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






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






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






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






34. Paper currency - has no real value






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






36. 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.






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






38. Short-Term securities are very good substitutes for each other within investor's portfolios who collectively impact the market. There aren't separate markets for short-term and long-term securities - there is one single market.






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






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






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






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






45. 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






46. More than 10 year maturities






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






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






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






50. 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.