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






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






3. 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.






4. Yields similar for all maturities






5. They have a higher interest-rate risk.






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






7. Many lead to more employment and output






8. Crucial role in creation of money






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






11. The percent of available labor force unemployed






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






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






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






15. Influence on business cycle - inflation - interest rates






16. Long-Term Debt and Equity Instruments






17. 30 year maturities but not since 2001






18. Lower the equilibrium price and interest rate.






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






20. The over the counter market. Equity shares offered by companies that don't meet listing requirements for major stock exchanges - or choose not to be listed there - and instead are traded in decentralized markets.






21. Nominal interest rate is not adjusted for inflation.






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






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






24. Real interest rate: the real interest rate actually realized.






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






26. 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)






27. Short-Term Debt Instruments






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






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






31. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






33. Intermediate Yields are highest






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






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






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






37. Allowing consumers to time their purchases better.






38. Higher default risk compared to municipal Bonds






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






40. A share of ownership in a corporation






41. Instrumental in moving funds between countries






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






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






44. Precious Metals or another valueable commodity






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






46. Used to measure value in the economy






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






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






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






50. 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.