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






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






3. No interest- rate risk

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






5. 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.






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






7. Comparing payoffs at different points in time






8. It will shift it to the right.






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






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






11. Currency + Traveler's Checks+ Demand Deposits + Other checkable deposits






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






13. 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.






14. The percent of available labor force unemployed






15. Most Common






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






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






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






19. Expectations theory forms the foundation of the slope of the curve. Liquidity Premium Theory makes Long Term permanent modifications that suggests an up ward slopping curve. Over short periods - relatives supplies of securities have an impact on yiel






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






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






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






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






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






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






26. Held for one- ten years.






27. Allowing consumers to time their purchases better.






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






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






30. Influence on business cycle - inflation - interest rates






31. 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)






32. Nominal interest rate is not adjusted for inflation.






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






34. Higher default risk compared to municipal Bonds






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






36. 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.






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






38. Greater incentive to borrow and less to lend.






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






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






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






42. Flow of earnings per unit of time






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






44. Intermediate Yields are highest






45. 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.






46. When bond is at par - the yield equals the coupon rate. The price and yield are negatively related. The yield greater than coupon rate when bond price is below par.






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






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






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