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






2. Short-Term Debt Instruments






3. A share of ownership in a corporation






4. A dollar paid to you one year from now is less valueable than a dollar paid to you today






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






6. Long-Term Debt and Equity Instruments






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






8. Held for one- ten years.






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






10. Instrumental in moving funds between countries






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






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






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






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






15. 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.






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






17. Less than one year and service current liquidity needs






18. More than 10 year maturities






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






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






21. 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.






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






23. 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.






24. Determines interest rates






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






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






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






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






29. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period






30. Many lead to more employment and output






31. 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.






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.






33. The percent of available labor force unemployed






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






35. Flow of earnings per unit of time






36. 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.






37. 30 year maturities but not since 2001






38. Comparing payoffs at different points in time






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






40. Allowing consumers to time their purchases better.






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






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






43. 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.






44. Rare






45. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.






46. Praises rising at a fast and furious pace






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






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






49. Yields similar for all maturities






50. Influence on business cycle - inflation - interest rates