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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 relationship between yield and maturity is...






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






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






4. The percent of available labor force unemployed






5. Yields similar for all maturities






6. 30 year maturities but not since 2001






7. 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.






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






9. 2 -5 -10 year maturities






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






11. A share of ownership in a corporation






12. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






15. Yield curves most always...






16. Praises rising at a fast and furious pace






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






18. 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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19. Many lead to more employment and output






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






21. 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.






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






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






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






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






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






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






28. 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)






29. Influence on business cycle - inflation - interest rates






30. Instrumental in moving funds between countries






31. Less than one year and service current liquidity needs






32. At lower prices (higher i) - ceteris paribus - the quantity demanded of bonds is higher- an inverse relationship ' ' the quantity supplied of bonds is lower- a positive relationship.






33. No interest- rate risk

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34. Precious Metals or another valueable commodity






35. Allowing consumers to time their purchases better.






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






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






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






40. Producing an efficient allocation of capital - which increases production






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






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






43. They have a higher interest-rate risk.






44. Nominal interest rate is not adjusted for inflation.






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






46. 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.






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






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






49. Long-Term Debt and Equity Instruments






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