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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. Producing an efficient allocation of capital - which increases production






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






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






4. They have a higher interest-rate risk.






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






6. Praises rising at a fast and furious pace






7. 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.






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






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






10. Bond denominated in a currency other than that of the country in which it is sold.






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






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






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






14. Influence on business cycle - inflation - interest rates






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






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






17. 30 year maturities but not since 2001






18. Flow of earnings per unit of time






19. It will shift it to the right.






20. 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.






21. Paper currency - has no real value






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






23. Excess liquidity is spent on goods and services






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






25. Long-Term Debt and Equity Instruments






26. 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.






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






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






29. Many lead to more employment and output






30. 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.






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






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






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






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






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






36. The central bank






37. Yields similar for all maturities






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






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






40. The degree of uncertainty associated with the return on one asset relative to alternative assets.






41. More than 10 year maturities






42. 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.






43. Less than one year and service current liquidity needs






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






45. Allowing consumers to time their purchases better.






46. No interest- rate risk

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






48. Greater incentive to borrow and less to lend.






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






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