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






2. 30 year maturities but not since 2001






3. Greater incentive to borrow and less to lend.






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






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






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






8. 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






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






10. Crucial role in creation of money






11. 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.






12. (Nominal) Interest Rate that is adjusted for expected changes in the price level. The more accurately reflects true cost of borrowing.






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






14. Used to measure value in the economy






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






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






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






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






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






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. 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.






22. 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.






23. Instrumental in moving funds between countries






24. Less than one year and service current liquidity needs






25. They have a higher interest-rate risk.






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






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






29. 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)






30. Excess liquidity is spent on goods and services






31. It will shift it to the right.






32. Short-Term Debt Instruments






33. If the short-term interest rates are high than the yield curve slopes?






34. No interest- rate risk

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35. Held for one- ten years.






36. Alters publics liquidity and influences spending through portfolio adjustment






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






38. Allowing consumers to time their purchases better.






39. Praises rising at a fast and furious pace






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






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






42. Long-Term Debt and Equity Instruments






43. 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.






44. 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.






45. Most Common






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






47. A share of ownership in a corporation






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






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






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