Test your basic knowledge |

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






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






3. Allowing consumers to time their purchases better.






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






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






6. 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.






7. Influence on business cycle - inflation - interest rates






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






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






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






11. Instrumental in moving funds between countries






12. Held for one- ten years.






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






14. Lower the equilibrium price and interest rate.






15. Paper currency - has no real value






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






17. Comparing payoffs at different points in time






18. Less than one year and service current liquidity needs






19. What will investors expect for taking on higher default risk?






20. Crucial role in creation of money






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






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






23. 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.






24. Praises rising at a fast and furious pace






25. 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


26. 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






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






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






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






30. Excess liquidity is spent on goods and services






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






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






33. Intermediate Yields are highest






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






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






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






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






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






39. The percent of available labor force unemployed






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






41. More than 10 year maturities






42. Lower transaction costs - reduce risk - asymmetric information.






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






44. It will shift it to the right.






45. Lower excess supply and lower price will fall and interest rates will rise






46. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






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






48. Higher default risk compared to municipal Bonds






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






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