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






2. Yields similar for all maturities






3. A share of ownership in a corporation






4. Higher default risk compared to municipal Bonds






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






6. When bond is at par - the yield equals the coupon rate. The price and yield are negatively related. The yield greater than coupon rate when bond price is below par.






7. 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.






8. 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.






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






10. Short-Term Debt Instruments






11. 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.






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






13. Rare






14. 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.






15. Less than one year and service current liquidity needs






16. They have a higher interest-rate risk.






17. Comparing payoffs at different points in time






18. Praises rising at a fast and furious pace






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






20. Long-Term Debt and Equity Instruments






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






22. No interest- rate risk

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23. 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.






24. 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.






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






26. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits






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






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






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






30. 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.






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






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






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






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






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






36. The central bank






37. Precious Metals or another valueable commodity






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






39. Alters publics liquidity and influences spending through portfolio adjustment






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






41. The percent of available labor force unemployed






42. 30 year maturities but not since 2001






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






44. Crucial role in creation of money






45. Allowing consumers to time their purchases better.






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






47. 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)






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






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






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







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