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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. 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






2. Paper currency - has no real value






3. Determines interest rates






4. Small depository institutions report infrequently and adjustments must be made for seasonal variations






5. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






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






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






10. 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.






11. Comparing payoffs at different points in time






12. 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






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






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






15. Praises rising at a fast and furious pace






16. Influence on business cycle - inflation - interest rates






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






18. Yields similar for all maturities






19. 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.






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






21. 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.






22. 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.






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






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






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






27. Flow of earnings per unit of time






28. 30 year maturities but not since 2001






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






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






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






32. 2 -5 -10 year maturities






33. Long-Term Debt and Equity Instruments






34. Excess liquidity is spent on goods and services






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






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






37. Yield curves most always...






38. They have a higher interest-rate risk.






39. Crucial role in creation of money






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






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






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






44. Alters publics liquidity and influences spending through portfolio adjustment






45. Precious Metals or another valueable commodity






46. Greater incentive to borrow and less to lend.






47. 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.






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






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






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






Can you answer 50 questions in 15 minutes?



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