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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 market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One






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






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






4. 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.






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






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






7. 2 -5 -10 year maturities






8. 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.






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






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






11. Influence on business cycle - inflation - interest rates






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






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






14. Held for one- ten years.






15. 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






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






17. Determines interest rates






18. 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.






19. Instrumental in moving funds between countries






20. Flow of earnings per unit of time






21. More than 10 year maturities






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






23. They have a higher interest-rate risk.






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






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






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






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






28. 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






29. Anything that is generally accepted in payment for goods or services or in the repayment of debts; a stock concept






30. Precious Metals or another valueable commodity






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






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






33. Crucial role in creation of money






34. No interest- rate risk

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35. 30 year maturities but not since 2001






36. 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.






37. A share of ownership in a corporation






38. 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.






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






40. 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.






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






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






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






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






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






46. It will shift it to the right.






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






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






49. Most Common






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