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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. 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.






2. Many lead to more employment and output






3. They have a higher interest-rate risk.






4. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.






5. Comparing payoffs at different points in time






6. 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






7. Less than one year and service current liquidity needs






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






9. Crucial role in creation of money






10. Medium of exchange; unit of account; store of value; increases the liquidity in the economy






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. Held for one- ten years.






13. 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.






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






15. Alters publics liquidity and influences spending through portfolio adjustment






16. It will shift it to the right.






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






18. 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


19. Used to measure value in the economy






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






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






22. 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






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






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






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






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






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






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






29. Precious Metals or another valueable commodity






30. 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.






31. 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.






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






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






34. More than 10 year maturities






35. Lower the equilibrium price and interest rate.






36. Nominal interest rate is not adjusted for inflation.






37. 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.






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






39. A share of ownership in a corporation






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






41. Determines interest rates






42. 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.






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






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






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






46. Instrumental in moving funds between countries






47. Higher default risk compared to municipal Bonds






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






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






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