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






2. 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.






3. 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.






4. 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.






5. Alters publics liquidity and influences spending through portfolio adjustment






6. Paper currency - has no real value






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






8. 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.






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






10. The interest rate at which private depository institutions lend balances to other depository institutions usually over night






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






12. Short-Term Debt Instruments






13. Allowing consumers to time their purchases better.






14. 30 year maturities but not since 2001






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






16. A bank loan typically used by a company to finance storage or shipment of goods. This bank draft is like a check - and guarantees future payment. These securities are active in the Secondary Market


17. Intermediate Yields are highest






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






19. Restrictions on Entry - Restrictions on Assets and Activities - Disclosure - Deposit Insurance - Limits on competition - and restriction on interest rates.






20. Yield curves most always...






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






22. A share of ownership in a corporation






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






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






25. 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.






26. Long-Term Debt and Equity Instruments






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






28. Yields similar for all maturities






29. 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.






30. The over the counter market. Equity shares offered by companies that don't meet listing requirements for major stock exchanges - or choose not to be listed there - and instead are traded in decentralized markets.






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






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






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






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






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






37. Comparing payoffs at different points in time






38. Instrumental in moving funds between countries






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






40. It will shift it to the right.






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






42. Used to measure value in the economy






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






44. Precious Metals or another valueable commodity






45. The increase in the price of set goods and services in a given economy over a period of time - the percent change.






46. The percent of available labor force unemployed






47. Lower the equilibrium price and interest rate.






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






49. 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






50. Praises rising at a fast and furious pace