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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. Alters publics liquidity and influences spending through portfolio adjustment






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






3. 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.






4. Used to measure value in the economy






5. A share of ownership in a corporation






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






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






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






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






10. Most Common






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






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






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






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






15. 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.






16. Paper currency - has no real value






17. Intermediate Yields are highest






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






19. 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.






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






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






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






23. 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






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






25. Greater incentive to borrow and less to lend.






26. Excess liquidity is spent on goods and services






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






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






29. 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.






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






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






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






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






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






35. 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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36. Determines interest rates






37. 30 year maturities but not since 2001






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






39. Influence on business cycle - inflation - interest rates






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






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






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






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






44. Precious Metals or another valueable commodity






45. 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.






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






47. It will shift it to the right.






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






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






50. 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.