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






2. Crucial role in creation of money






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






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






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






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






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






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






9. 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)






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






11. The central bank






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






13. Held for one- ten years.






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






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






16. 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.






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






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






19. 30 year maturities but not since 2001






20. Long-Term Debt and Equity Instruments






21. Pays owner of bond a fixed payment - until maturity when it pays off face par value






22. More than 10 year maturities






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






24. 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.






25. Allowing consumers to time their purchases better.






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






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






28. It will shift it to the right.






29. Bringing together of buyers and sellers of financial securities to establish prices; includes banks - savings and loans - credit unions - investment banks - and brokers - mutual funds - and bond markets.






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






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






32. Determines interest rates






33. Praises rising at a fast and furious pace






34. Comparing payoffs at different points in time






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






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






37. 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.






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






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






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






41. Less than one year and service current liquidity needs






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






44. Rare






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






46. Precious Metals or another valueable commodity






47. 2 -5 -10 year maturities






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






49. A share of ownership in a corporation






50. Intermediate Yields are highest