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Test your basic knowledge |
DSST Money And Banking
Start Test
Study First
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. Pays owner of bond a fixed payment - until maturity when it pays off face par value
Certificate of Deposit
How Financial Markets promote economic efficiency
Eurobond
Coupon Bond
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.
monetary policy
Price-level effect
Repo
Federal Funds Market
3. Short-Term Debt Instruments
Money Market
who determines our money supply
Long-run Movements
How do regulations ensure the soundness of Financial Intermediaries?
4. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.
Interest rate
Real Interest Rate
M1
Forms of Commercial Papers
5. They have a higher interest-rate risk.
Real world obervations
Tbonds
Fiat Money
Why returns are more volatile for Long-Term bonds
6. The total collection of pieces of property that serve to store value
Short-Term Maturity
Expected Return
Regulations increase information available to investors which does what?
Wealth
7. The degree of uncertainty associated with the return on one asset relative to alternative assets.
Risk
Term structure theory
Unit of Account
recession
8. If the short-term interest rates are high than the yield curve slopes?
Evolution of the Payment System
Fisher Effect
Simple Loan
Downward
9. Allowing consumers to time their purchases better.
business cycle
Yield Curve
Humped Yield Curves
How Financial Markets directly improve the well-being of consumers
10. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money
Why Revisions are issued to money data
Expected Return
Evolution of the Payment System
monetary policy
11. Nominal interest rate is not adjusted for inflation.
Interest rate
Money (money supply)
Higher Returns
Federal Funds Market
12. Bought at price below face value and face value repaid at maturity
Discount (zero coupon) Bond
Supply and Demand for Bonds
Corporate Bonds
interest rate
13. 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.
Real Interest Rate
Interest rate
Hs a greater upward shift
T-Bills
14. 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.
Wealth
banks and money supply
Supply and Demand for Bonds
Flat yield curves
15. Comparing payoffs at different points in time
tax structure
Money Market
How do regulations ensure the soundness of Financial Intermediaries?
Use present value calculations
16. 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.
financial markets/institutions
How do regulations ensure the soundness of Financial Intermediaries?
Income effect
T-Bonds
17. Determines interest rates
bond market (money markets)
Interest rate
foreign exchange market
common stock
18. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending
bond market (money markets)
Repo
Corporate Bond Default risk
indirect impact
19. Instrumental in moving funds between countries
Capital Markets
Kind of risk for a bond that's maturity equals the holding period
foreign exchange market
Humped Yield Curves
20. The interest rate at which private depository institutions lend balances to other depository institutions usually over night
Income effect
How Financial Markets promote economic efficiency
business cycle
federal funds rate
21. Promotes economic efficiency by minimizing the time spent in exchanging goods and services
Hs a greater upward shift
Why Revisions are issued to money data
Medium of Exchange
Money (money supply)
22. Praises rising at a fast and furious pace
Why Revisions are issued to money data
who determines our money supply
Fiat Money
hyperinflation
23. The relationship between yield and maturity is...
Income effect
Not constant
role of money
who determines our money supply
24. Higher default risk compared to municipal Bonds
bond market (money markets)
business cycle
Corporate Bond Default risk
central bank
25. Financial instruments whose return is based on the underlying returns on mortgage loans.
Mortgage-Backed Securities
Hs a greater upward shift
Capital Markets
Medium of Exchange
26. 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.
Eurocurrency
central bank
Long-run Movements
Long-Term Maturities (Bond Market)
27. The market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One
T-Notes
Keynesian Model
Fisher Effect
Regulations increase information available to investors which does what?
28. The percent of available labor force unemployed
Regulations increase information available to investors which does what?
Not constant
Use present value calculations
unemployment rate
29. Lower Incentive to borrow but a greater incentive to lend.
Hs a greater upward shift
Present Discount Value
When real rate is high
Slope upward
30. What kind of movements should we pay attention to in money supply numbers?
direct impact
Velocity
Humped Yield Curves
Long-run Movements
31. The increase in the price of set goods and services in a given economy over a period of time - the percent change.
business cycle
financial markets
recession
inflation
32. 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.
Price vs Yields to Maturity
direct impact
Term structure theory
foreign exchange market
33. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.
interest rate
How Financial Markets promote economic efficiency
Long-Term Maturities (Bond Market)
function of financial markets
34. If short-term interest rates are low than the yield curve slopes...
Upward
Together
easily standardized - widely accepted - divisible and not deteriorate quickly
hyperinflation
35. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period
Velocity
Evolution of the Payment System
Kind of risk for a bond that's maturity equals the holding period
Higher Returns
36. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.
Yield Curve
Not constant
How Financial Markets directly improve the well-being of consumers
Upward Slops
37. Rare
Tnotes
Downward Slopes
The Liquidity Premium Modification
federal funds rate
38. Small depository institutions report infrequently and adjustments must be made for seasonal variations
Why Revisions are issued to money data
Fisher Effect
Intermediate-term Maturity (Capital Market)
Simple Loan
39. 30 year maturities but not since 2001
banks and money supply
Tbonds
Real Interest Rate
T-Notes
40. Supply and demand concept for different maturities will establish the specific rates for each maturity range. Changes in supply and demand can cause the rates to get out of line with expectations. However investors will drop preferred habitat if rate
Medium of Exchange
Real world obervations
The Preferred Habitat Approach
Hs a greater upward shift
41. Investors are concerned about the after tax return on bonds
tax structure
Intermediate-term Maturity (Capital Market)
Risk
Upward
42. Greater incentive to borrow and less to lend.
When real rate is low
Downward
bond
Tbonds
43. Relationship among yields of different maturities of hte same type of security.
Corporate Bonds
inflation
Real world obervations
Term Structure
44. Real interest rate: the real interest rate actually realized.
Ex Post
recession
Medium of Exchange
Yield Curve
45. Crucial role in creation of money
Hs a greater upward shift
Keynesian Model
Tbonds
banks and money supply
46. One to Ten year maturities which fund long-term capital investments
How Financial Markets promote economic efficiency
Money (money supply)
Corporate Bond Default risk
Intermediate-term Maturity (Capital Market)
47. Used to measure value in the economy
Eurobond
Unit of Account
Why returns are more volatile for Long-Term bonds
hyperinflation
48. For a commodity to function efficiently as money it must be...
Banker's Acceptance
easily standardized - widely accepted - divisible and not deteriorate quickly
Yield on a Discount Basis
Why Revisions are issued to money data
49. 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.
Store of Value
Eurobond
Repo
Foreign Bonds
50. Influence on business cycle - inflation - interest rates
Bd > Bs
monetary policy
Function of Financial Intermediaries
Price-level effect