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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. Long-Term Debt and Equity Instruments






2. 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.






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






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






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






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






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






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






9. More than 10 year maturities






10. Comparing payoffs at different points in time






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






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






13. Praises rising at a fast and furious pace






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






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






16. 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.






17. Allows transfer of funds from person or business without investment opportunities to one who has them - improves economic efficiency.






18. Higher default risk compared to municipal Bonds






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. Held for one- ten years.






21. Crucial role in creation of money






22. 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.






23. Many lead to more employment and output






24. Less than one year and service current liquidity needs






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






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






27. 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.






28. Instrumental in moving funds between countries






29. 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.






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






31. Short-Term Debt Instruments






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






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






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






35. Lower the equilibrium price and interest rate.






36. 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.






37. 2 -5 -10 year maturities






38. Most Common






39. 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

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






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






42. Rare






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






44. Determines interest rates






45. When interest rates are high relative to past rates - investors expect them to decline and the prices of bonds to rise in the future resulting in big capital gains. Investors would then favor long term securities which drives up price and lowers yiel






46. Alters publics liquidity and influences spending through portfolio adjustment






47. 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.






48. The central bank






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






50. Yield curves most always...







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