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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. 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.






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






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






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






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






6. Short-Term Debt Instruments






7. 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.






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






9. Crucial role in creation of money






10. Graphical relationship of the yield on bonds with differing terms to maturity but the same risk - liquidity and tax considerations.






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






12. Intermediate Yields are highest






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






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






15. 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.






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






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






18. Yields similar for all maturities






19. Lower the equilibrium price and interest rate.






20. 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.






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






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






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






24. 4 -13 -26 -52 week maturities. Sold at zero coupon rates






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






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






27. Allowing consumers to time their purchases better.






28. Used to measure value in the economy






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






30. The percent of available labor force unemployed






31. 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.






32. 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.






33. Excess liquidity is spent on goods and services






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






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






36. 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)






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






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






39. Paper currency - has no real value






40. 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.






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






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






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






44. Less than one year and service current liquidity needs






45. Instrumental in moving funds between countries






46. Nominal interest rate is not adjusted for inflation.






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






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






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






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