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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. Comparing payoffs at different points in time






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






3. Nominal interest rate is not adjusted for inflation.






4. 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.






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






6. More than 10 year maturities






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






8. Crucial role in creation of money






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






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






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






12. The upward and downward movement of aggregate output produced in the economy.






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






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






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






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






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






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






19. 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.






20. 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.






21. 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






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






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






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






25. Principal plus interest paid to lender at given maturity date






26. Determines interest rates






27. Excess liquidity is spent on goods and services






28. 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






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






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






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






32. The percent of available labor force unemployed






33. Short-Term Debt Instruments






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






35. Instrumental in moving funds between countries






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






37. Rare






38. Yields similar for all maturities






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






40. A share of ownership in a corporation






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






42. Lower the equilibrium price and interest rate.






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






44. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period






45. 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.






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






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






48. It will shift it to the right.






49. 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.






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