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






2. Higher default risk compared to municipal Bonds






3. Less than one year and service current liquidity needs






4. Nominal interest rate is not adjusted for inflation.






5. Lower the equilibrium price and interest rate.






6. Many lead to more employment and output






7. Paper currency - has no real value






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






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. Allowing consumers to time their purchases better.






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






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






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






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






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






16. The rate at which money circulates and the number of times the average dollar bill changes hands in a given time period






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






19. Praises rising at a fast and furious pace






20. They have a higher interest-rate risk.






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






22. Instrumental in moving funds between countries






23. Determines interest rates






24. A share of ownership in a corporation






25. Rare






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






27. Yields similar for all maturities






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






29. 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.






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






31. 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.






32. 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.






33. It will shift it to the right.






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






35. Yield curves most always...






36. 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.






37. Influence on business cycle - inflation - interest rates






38. 2 -5 -10 year maturities






39. 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.






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






41. Used to measure value in the economy






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






43. The higher the default risk means the yield curve...






44. Short-Term Debt Instruments






45. The percent of available labor force unemployed






46. One to Ten year maturities which fund long-term capital investments






47. Greater incentive to borrow and less to lend.






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






49. Flow of earnings per unit of time






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