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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. A share of ownership in a corporation






2. Flow of earnings per unit of time






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






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






5. 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.






6. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






9. 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.






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






11. Precious Metals or another valueable commodity






12. The percent of available labor force unemployed






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






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






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






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






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






18. Rare






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






20. Prices of Long-Term securities are more volatile possibly suffer Capital Loss if owner needs to sell security prior to maturity. Prefer to hold Short-term securities for liquidity. Suggests Long term rates will always be higher than short term.






21. Higher default risk compared to municipal Bonds






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






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






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






25. 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.






26. 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.






27. 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.






28. Investors are concerned about the after tax return on bonds






29. Intermediate Yields are highest






30. It will shift it to the right.






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. Long-Term Debt and Equity Instruments






33. No interest- rate risk

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34. Most Common






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






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






37. 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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38. Excess liquidity is spent on goods and services






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






40. Short-Term Debt Instruments






41. 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






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






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






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






45. 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.






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






47. 2 -5 -10 year maturities






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






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






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