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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. Intermediate Yields are highest






2. Praises rising at a fast and furious pace






3. Paper currency - has no real value






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






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






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






7. 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.






8. 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.






9. A share of ownership in a corporation






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






11. They have a higher interest-rate risk.






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






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






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






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






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






17. Comparing payoffs at different points in time






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






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






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






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






22. 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.






23. Influence on business cycle - inflation - interest rates






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






25. The increase in the price of set goods and services in a given economy over a period of time - the percent change.






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






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






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






29. 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)






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






31. 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






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






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






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






35. Banks borrow from and lend to each other deposits they hold at the Fed. These are very short term and usually only held over night.






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






37. Flow of earnings per unit of time






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






39. 2 -5 -10 year maturities






40. Long-Term Debt and Equity Instruments






41. The percent of available labor force unemployed






42. 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.






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






44. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






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






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






49. Instrumental in moving funds between countries






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







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