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






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






3. Influence on business cycle - inflation - interest rates






4. 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






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






6. Intermediate Yields are highest






7. Alters publics liquidity and influences spending through portfolio adjustment






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






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






10. Most Common






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






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






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






14. 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.






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






16. 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.






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






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






19. Yield curves most always...






20. Crucial role in creation of money






21. Determines interest rates






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






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






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






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






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






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






28. The percent of available labor force unemployed






29. Used to measure value in the economy






30. Excess liquidity is spent on goods and services






31. 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.






32. 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.






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






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






35. 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.






36. Held for one- ten years.






37. Less than one year and service current liquidity needs






38. Long-Term Debt and Equity Instruments






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






40. It will shift it to the right.






41. Rare






42. 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.






43. 2 -5 -10 year maturities






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






45. A share of ownership in a corporation






46. More than 10 year maturities






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






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






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






50. Higher default risk compared to municipal Bonds







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