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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. 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.






2. They have a higher interest-rate risk.






3. 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.






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






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






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






7. Influence on business cycle - inflation - interest rates






8. Yield curves most always...






9. Greater incentive to borrow and less to lend.






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






11. 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.






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






13. Used to measure value in the economy






14. Determines interest rates






15. Long-Term Debt and Equity Instruments






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






17. Principal plus interest paid to lender at given maturity date






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






19. Flow of earnings per unit of time






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






21. Lower the equilibrium price and interest rate.






22. Nominal interest rate is not adjusted for inflation.






23. Instrumental in moving funds between countries






24. More than 10 year maturities






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






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






27. Alters publics liquidity and influences spending through portfolio adjustment






28. Precious Metals or another valueable commodity






29. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






30. Rare






31. 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)






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






33. Comparing payoffs at different points in time






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






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






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






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






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






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






40. No interest- rate risk

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






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






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






44. Supply and demand concept for different maturities will establish the specific rates for each maturity range. Changes in supply and demand can cause the rates to get out of line with expectations. However investors will drop preferred habitat if rate






45. 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.






46. 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.






47. If the short-term interest rates are high than the yield curve slopes?






48. Allowing consumers to time their purchases better.






49. Most Common






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