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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. Rare






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






3. Interest rate that equates today's value with present value of all future payments.






4. 30 year maturities but not since 2001






5. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






8. Higher default risk compared to municipal Bonds






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






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






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






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






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






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






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






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






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






18. Flow of earnings per unit of time






19. Yield curves most always...






20. Crucial role in creation of money






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






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






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






24. Nominal interest rate is not adjusted for inflation.






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






26. Held for one- ten years.






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






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






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






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






31. The market for loanable funds: (or equivalently - the market for bonds) determines R. One-for-One






32. The percent of available labor force unemployed






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






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






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






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






37. 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.






38. Determines interest rates






39. Greater incentive to borrow and less to lend.






40. 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.






41. Most Common






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






43. Used to measure value in the economy






44. 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


45. 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.






46. Influence on business cycle - inflation - interest rates






47. Intermediate Yields are highest






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






49. A share of ownership in a corporation






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