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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. 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.






2. Allowing consumers to time their purchases better.






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






4. 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






5. They channel funds from savers to investors - thereby promoting economic efficiency






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






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






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






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






10. Most Common






11. Seller will buy back the asset at a later date and typically at a higher price. These securities are usually government securities and are used by banks and Large Corporations.






12. 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.






13. Comparing payoffs at different points in time






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






15. The central bank






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






17. Short-Term Debt Instruments






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






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






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






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






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






23. No interest- rate risk

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24. 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.






25. Nominal interest rate is not adjusted for inflation.






26. Used to measure value in the economy






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






28. 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.






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






30. Determines interest rates






31. Influence on business cycle - inflation - interest rates






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






33. Precious Metals or another valueable commodity






34. Crucial role in creation of money






35. Yield curves most always...






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






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






38. Producing an efficient allocation of capital - which increases production






39. 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)






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






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






42. Intermediate Yields are highest






43. Higher default risk compared to municipal Bonds






44. 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.






45. Held for one- ten years.






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






47. They have a higher interest-rate risk.






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






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






50. Rare







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