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






2. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






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






4. 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






5. 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)






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






7. It will shift it to the right.






8. 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.






9. Greater incentive to borrow and less to lend.






10. More than 10 year maturities






11. Short-Term Debt Instruments






12. Used to measure value in the economy






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






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






15. A share of ownership in a corporation






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






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






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






20. They have a higher interest-rate risk.






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






22. Less than one year and service current liquidity needs






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






24. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






27. Precious Metals or another valueable commodity






28. 3 -6 -12 month securities with no explicit one payment and is sold at a discount. These securities are highly liquid - and can be traded in the secondary market. These are some of the safest securities.






29. Long-Term Debt and Equity Instruments






30. Many lead to more employment and output






31. Lower the equilibrium price and interest rate.






32. 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.






33. 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.






34. Yield to maturity; a measure of an interternporal price






35. The percent of available labor force unemployed






36. Rare






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






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






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






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






41. No interest- rate risk

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42. Influence on business cycle - inflation - interest rates






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






44. Lower transaction costs - reduce risk - asymmetric information.






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






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






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






48. Determines interest rates






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






50. Allowing consumers to time their purchases better.