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. Precious Metals or another valueable commodity






2. Crucial role in creation of money






3. Commodity Money - Fiat Money - Checks - Electronic Payment - E-Money






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






5. 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.






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






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






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






9. 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






10. Long-Term Debt and Equity Instruments






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






12. 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.






13. Determines interest rates






14. Yields similar for all maturities






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






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






17. They have a higher interest-rate risk.






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






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






20. 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.






21. Less than one year and service current liquidity needs






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






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






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






25. More than 10 year maturities






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






27. 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.






28. Intermediate Yields are highest






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






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






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






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






34. No interest- rate risk

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






36. Many lead to more employment and output






37. 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.






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






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






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






41. Short-Term Debt Instruments






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






43. 2 -5 -10 year maturities






44. Used to measure value in the economy






45. It will shift it to the right.






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






47. 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.






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






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






50. Excess liquidity is spent on goods and services