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






2. It will shift it to the right.






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






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






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






6. The central bank






7. Influence on business cycle - inflation - interest rates






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






9. 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.






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






11. Held for one- ten years.






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






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






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






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






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






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






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






19. Intermediate Yields are highest






20. Lower the equilibrium price and interest rate.






21. Long-Term Debt and Equity Instruments






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






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






24. No interest- rate risk

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






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






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






28. 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.






29. Flow of earnings per unit of time






30. Less than one year and service current liquidity needs






31. Short-Term Debt Instruments






32. A share of ownership in a corporation






33. 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.






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






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






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






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






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






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






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






41. 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






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






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






44. 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.






45. Higher default risk compared to municipal Bonds






46. Many lead to more employment and output






47. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.






48. What kind of movements should we pay attention to in money supply numbers?






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






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