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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. Higher default risk compared to municipal Bonds






2. Less than one year and service current liquidity needs






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. Used to measure value in the economy






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






6. 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)






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






8. Precious Metals or another valueable commodity






9. 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.






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






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






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






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






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






15. Long-Term Debt and Equity Instruments






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






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






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






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






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






21. 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.






22. Praises rising at a fast and furious pace






23. 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.






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






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






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






27. 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






28. Many lead to more employment and output






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






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






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






32. They have a higher interest-rate risk.






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






34. 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.






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. Instrumental in moving funds between countries






37. Determines interest rates






38. 2 -5 -10 year maturities






39. 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.






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






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






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






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






45. Influence on business cycle - inflation - interest rates






46. Alters publics liquidity and influences spending through portfolio adjustment






47. 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.






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






49. Allowing consumers to time their purchases better.






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






Can you answer 50 questions in 15 minutes?



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