Test your basic knowledge |

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






3. Long-Term debt instruments of Corporations which are held 2-30 years. These securities have excellent credit ratings and pay interest two times a year and pay at maturity. These can be redeemed for shares of stock.






4. Lower the equilibrium price and interest rate.






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






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






7. Flow of earnings per unit of time






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






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






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






11. 2 -5 -10 year maturities






12. 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.






13. A share of ownership in a corporation






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






15. Held for one- ten years.






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






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






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






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






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






21. 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)






22. 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.






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






24. Less accurate but is less difficult to calculate. It always understates the yield to maturity and becomes more severe the longer the maturity.






25. 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.






26. Used to measure value in the economy






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






28. Excess liquidity is spent on goods and services






29. 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


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






31. Paper currency - has no real value






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






33. They have a higher interest-rate risk.






34. Precious Metals or another valueable commodity






35. 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.






36. Most Common






37. 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.






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






39. The central bank






40. Yield curves most always...






41. The percent of available labor force unemployed






42. Cost of borrowing money - expressed as a percentage of the amount borrowed per year.






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






44. More than 10 year maturities






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






46. 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






47. Praises rising at a fast and furious pace






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






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






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