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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. Many lead to more employment and output






2. A share of ownership in a corporation






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






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






5. Determines interest rates






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






7. If short-term interest rates are low than the yield curve slopes...






8. Greater incentive to borrow and less to lend.






9. 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.






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






11. Precious Metals or another valueable commodity






12. 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






13. Flow of earnings per unit of time






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






15. Yields similar for all maturities






16. Alters publics liquidity and influences spending through portfolio adjustment






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






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






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






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






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






22. 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.






23. Reduces adverse selection - moral hazard - and insider trading.






24. Rare






25. It will shift it to the right.






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






27. Used to measure value in the economy






28. Praises rising at a fast and furious pace






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






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






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






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






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






34. Financial instruments whose return is based on the underlying returns on mortgage loans.






35. 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.






36. Paper currency - has no real value






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






38. Restrictions on Entry - Restrictions on Assets and Activities - Disclosure - Deposit Insurance - Limits on competition - and restriction on interest rates.






39. 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.






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






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






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






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






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






45. Held for one- ten years.






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






47. 30 year maturities but not since 2001






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






49. 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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50. 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.