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Test your basic knowledge |
DSST Money And Banking
Start Test
Study First
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. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money
Income effect
Evolution of the Payment System
Downward Slopes
Risk
2. Crucial role in creation of money
Federal Funds Market
banks and money supply
Why Revisions are issued to money data
Intermediate-term Maturity (Capital Market)
3. Financial instruments whose return is based on the underlying returns on mortgage loans.
foreign exchange market
Velocity
Mortgage-Backed Securities
Keynesian Model
4. Small depository institutions report infrequently and adjustments must be made for seasonal variations
Money Market
recession
Why Revisions are issued to money data
How do regulations ensure the soundness of Financial Intermediaries?
5. One to Ten year maturities which fund long-term capital investments
Intermediate-term Maturity (Capital Market)
banks and money supply
Price-level effect
central bank
6. Real interest rate: the real interest rate people expect at the time they buy a bond or tax out a loan.
How Financial Markets directly improve the well-being of consumers
Ex Ante
Money Market
direct impact
7. Take the form of promissory notes - drafts - checks - and CDs
Yield Curve
Risk
Forms of Commercial Papers
Supply and Demand for Bonds
8. Held ten years or more. They pay semiannual dividends and return of principal at maturity.
T-Bonds
How Financial Markets directly improve the well-being of consumers
Unit of Account
financial markets
9. It determines the equilibrium interest rate in terms of the supply of land demanded for money . People store their wealth in money and bonds. If the market for money is in equilibrium (Ms=Md) then the bond markets are also in equilibrium (Bs=Bd)
Term Structure
Eurocurrency Market
Ex Post
Keynesian Model
10. Allows transfer of funds from person or business without investment opportunities to one who has them - improves economic efficiency.
function of financial markets
How Financial Markets promote economic efficiency
Repo
Yield on a Discount Basis
11. The central bank
who determines our money supply
Slope upward
Foreign Bonds
bond
12. For a commodity to function efficiently as money it must be...
Downward Slopes
Fisher Effect
easily standardized - widely accepted - divisible and not deteriorate quickly
T-Bills
13. Held for one- ten years.
Store of Value
T-Notes
Eurocurrency
Repo
14. Real interest rate: the real interest rate actually realized.
Store of Value
Ex Post
monetary policy
Corporate Bond Default risk
15. The degree of uncertainty associated with the return on one asset relative to alternative assets.
Evolution of the Payment System
Flat yield curves
T-Bonds
Risk
16. 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.
Bd = Bs
Certificate of Deposit
unemployment rate
Higher Returns
17. The upward and downward movement of aggregate output produced in the economy.
business cycle
who determines our money supply
M1
Income effect
18. Purchase financial assets which lowers interest rates which stimulates business investment and consumer spending
role of money
Supply and Demand for Bonds
Fisher Effect
indirect impact
19. 30 year maturities but not since 2001
financial markets/institutions
Velocity
Tbonds
Long-run Movements
20. Long-Term Debt and Equity Instruments
Capital Markets
How Financial Markets directly improve the well-being of consumers
Use present value calculations
Eurobond
21. Pays owner of bond a fixed payment - until maturity when it pays off face par value
How Financial Markets promote economic efficiency
Coupon Bond
Kind of risk for a bond that's maturity equals the holding period
Capital Markets
22. More than 10 year maturities
T-Bonds
Yield on a Discount Basis
Long-Term Maturities (Bond Market)
Humped Yield Curves
23. Lower transaction costs - reduce risk - asymmetric information.
Function of Financial Intermediaries
central bank
Fiat Money
financial markets
24. 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.
Function of Financial Intermediaries
Eurobond
Yield on a Discount Basis
Supply and Demand for Bonds
25. Allowing consumers to time their purchases better.
OTC
Present Discount Value
How Financial Markets directly improve the well-being of consumers
Discount (zero coupon) Bond
26. The higher the default risk means the yield curve...
Hs a greater upward shift
central bank
Risk
Short-Term Maturity
27. Principal plus interest paid to lender at given maturity date
Use present value calculations
Intermediate-term Maturity (Capital Market)
Federal Funds Market
Simple Loan
28. It will shift it to the right.
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
unemployment rate
central bank
Medium of Exchange
29. 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.
Hs a greater upward shift
Interest rate
Upward
financial markets/institutions
30. Markets bonds - loans - and deposits denominated in the currency of a given nation but held and traded outside that nations borders.
inflation
easily standardized - widely accepted - divisible and not deteriorate quickly
Humped Yield Curves
Eurocurrency Market
31. Restrictions on Entry - Restrictions on Assets and Activities - Disclosure - Deposit Insurance - Limits on competition - and restriction on interest rates.
Fiat Money
financial markets/institutions
Forms of Commercial Papers
How do regulations ensure the soundness of Financial Intermediaries?
32. Determines interest rates
bond market (money markets)
Intermediate-term Maturity (Capital Market)
Hs a greater upward shift
Corporate Bond Default risk
33. Praises rising at a fast and furious pace
Evolution of the Payment System
hyperinflation
Yield Curve
Why returns are more volatile for Long-Term bonds
34. Comparing payoffs at different points in time
Regulations increase information available to investors which does what?
Slope upward
Use present value calculations
Yield Curve
35. Periods of declining aggregate output - unemployment high - investment is low.
recession
role of money
Kind of risk for a bond that's maturity equals the holding period
Corporate Bonds
36. They channel funds from savers to investors - thereby promoting economic efficiency
Upward Slops
Interest rate
financial markets
Price-level effect
37. 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.
Expected Return
Real Interest Rate
Banker's Acceptance
Repo
38. If short-term interest rates are low than the yield curve slopes...
Present Discount Value
Upward
Price vs Yields to Maturity
Expected Return
39. Foreign currencies deposited in banks outside the home country.
increasing money supply
Mortgage-Backed Securities
Eurocurrency
unemployment rate
40. Producing an efficient allocation of capital - which increases production
T-Bonds
Eurocurrency
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
How Financial Markets promote economic efficiency
41. Less than one year and service current liquidity needs
Yield to Maturity for simple loans
Short-Term Maturity
Ex Ante
What will an increase in the money supply engineered by the Federal Reserve do to the supply curve for money?
42. Short-Term securities are very good substitutes for each other within investor's portfolios who collectively impact the market. There aren't separate markets for short-term and long-term securities - there is one single market.
The Preferred Habitat Approach
The Expectation Approach
Ex Post
Keynesian Model
43. Promotes economic efficiency by minimizing the time spent in exchanging goods and services
The Preferred Habitat Approach
Upward Slops
Medium of Exchange
foreign exchange market
44. Rare
Corporate Bonds
role of money
Downward Slopes
Function of Financial Intermediaries
45. Fixed payment (incorporating part of the principal and interest payment) paid over a period of time
financial markets
Fixed Payment-Loan
Expected Return
function of financial markets
46. Precious Metals or another valueable commodity
Price vs Yields to Maturity
Term Structure
Kind of risk for a bond that's maturity equals the holding period
Commodity Money
47. 2 -5 -10 year maturities
increases in money supply causes
Short-Term Maturity
Discount (zero coupon) Bond
Tnotes
48. A dollar paid to you one year from now is less valueable than a dollar paid to you today
Present Discount Value
function of financial markets
Discount (zero coupon) Bond
T-Bonds
49. A share of ownership in a corporation
common stock
When real rate is high
Use present value calculations
Regulations increase information available to investors which does what?
50. Intermediate Yields are highest
How Financial Markets directly improve the well-being of consumers
Price-level effect
Humped Yield Curves
Discount (zero coupon) Bond