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






2. Paper currency - has no real value






3. 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.






4. 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.






5. Flow of earnings per unit of time






6. 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.






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






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






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






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






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. Higher default risk compared to municipal Bonds






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






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






15. Influence on business cycle - inflation - interest rates






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






17. 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.






18. Crucial role in creation of money






19. Allowing consumers to time their purchases better.






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






21. Lower excess supply and lower price will fall and interest rates will rise






22. Greater incentive to borrow and less to lend.






23. 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.






24. A share of ownership in a corporation






25. 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






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






27. Yields similar for all maturities






28. Short-Term Debt Instruments






29. Excess liquidity is spent on goods and services






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






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






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






33. Comparing payoffs at different points in time






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






35. The percent of available labor force unemployed






36. Precious Metals or another valueable commodity






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






38. Nominal interest rate is not adjusted for inflation.






39. Lower the equilibrium price and interest rate.






40. 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.






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






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






43. Instrumental in moving funds between countries






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






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






46. More than 10 year maturities






47. Many lead to more employment and output






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






49. 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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50. 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.