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






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






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






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






5. The central bank






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






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






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






9. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






10. Nominal interest rate is not adjusted for inflation.






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






12. Determines interest rates






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






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






15. The percent of available labor force unemployed






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






17. 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)






18. Used to measure value in the economy






19. Allowing consumers to time their purchases better.






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






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






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






23. Instrumental in moving funds between countries






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






25. 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.






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






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






28. Higher default risk compared to municipal Bonds






29. 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.






30. 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.






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






32. Precious Metals or another valueable commodity






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






34. 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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35. Long-Term Debt and Equity Instruments






36. 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






37. Influence on business cycle - inflation - interest rates






38. Pays owner of bond a fixed payment - until maturity when it pays off face par value






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






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






41. 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.






42. Less than one year and service current liquidity needs






43. Praises rising at a fast and furious pace






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






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






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






47. Yield curves most always...






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






49. Rare






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







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