Test your basic knowledge |

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






2. Greater incentive to borrow and less to lend.






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






4. 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.






5. Flow of earnings per unit of time






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






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






8. 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.






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






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






11. 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.






12. 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

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


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






14. More than 10 year maturities






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






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






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






18. 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.






19. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.






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






21. Used to measure value in the economy






22. Influence on business cycle - inflation - interest rates






23. Most Common






24. 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






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






26. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.






27. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






29. 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






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






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






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






33. Paper currency - has no real value






34. Long-Term Debt and Equity Instruments






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






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






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






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






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






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






41. 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.






42. Precious Metals or another valueable commodity






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






44. They have a higher interest-rate risk.






45. The percent of available labor force unemployed






46. Instrumental in moving funds between countries






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






48. 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.






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






50. Determines interest rates