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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 total collection of pieces of property that serve to store value






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






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






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






5. Alters publics liquidity and influences spending through portfolio adjustment






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






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






8. Most Common






9. Determines interest rates






10. Paper currency - has no real value






11. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits






12. 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.






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






14. 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.






15. Yields similar for all maturities






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






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






18. The percent of available labor force unemployed






19. 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.






20. Excess liquidity is spent on goods and services






21. Higher default risk compared to municipal Bonds






22. No interest- rate risk


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






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






25. 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)






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






27. Long-Term Debt and Equity Instruments






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






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






30. Rare






31. They have a higher interest-rate risk.






32. Precious Metals or another valueable commodity






33. Greater incentive to borrow and less to lend.






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






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






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






37. Yield curves most always...






38. A share of ownership in a corporation






39. Prices of Long-Term securities are more volatile possibly suffer Capital Loss if owner needs to sell security prior to maturity. Prefer to hold Short-term securities for liquidity. Suggests Long term rates will always be higher than short term.






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






41. The relationship between yield and maturity is...






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






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






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






45. 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.






46. 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.






47. It will shift it to the right.






48. Crucial role in creation of money






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






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