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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. 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.






2. It will shift it to the right.






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






4. Crucial role in creation of money






5. 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.






6. Nominal interest rate is not adjusted for inflation.






7. More than 10 year maturities






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






9. 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






10. Producing an efficient allocation of capital - which increases production






11. They have a higher interest-rate risk.






12. Yield curves most always...






13. 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.






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






15. 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.






16. 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.






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






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






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






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






21. A share of ownership in a corporation






22. No interest- rate risk

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






24. 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.






25. Intermediate Yields are highest






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






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






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






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






31. Flow of earnings per unit of time






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






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






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






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






36. Comparing payoffs at different points in time






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






38. Less than one year and service current liquidity needs






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






40. Most Common






41. Many lead to more employment and output






42. Allowing consumers to time their purchases better.






43. Determines interest rates






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






45. 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.






46. Influence on business cycle - inflation - interest rates






47. 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.






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






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






50. Rare