Which accurately describes the requirements banks must meet under a fractional?
Which accurately describes the requirements banks must meet under a fractional reserve banking system? Banks must keep a specific percentage of deposits on hand. Banks must pay a specific fraction of their assets in taxes.
Which best describes the most likely effect of the sale of a new batch of treasury bonds?
Which describes the most likely effect of the sale of a new batch of Treasury bonds? The purchase of bonds reduces the bond buyers’ bank accounts.
Which does buying on margin involve quizlet?
Buying on margin involves getting a loan from your brokerage and using the money from the loan to invest in more securities than you can buy with your available cash.
Which of the following best describes the exchange of currencies?
The answer is D. an exchange of currencies happens when you “trade” one currency for another, which can also be thought of buying one currency in the form of another currency.
What are the three ways government takes money?
In general, there are three primary ways that governments can raise money:
- Taxation–they legally require their citizens to hand it to them under the threat of coercion.
- Borrowing–they request an amount of money and issue bonds to those who give it to them, promising to repay the money with some amount of interest.
Why is buying on margin a risk quizlet?
Terms in this set (14) Buying on margin refers to the buying of stocks primarily by borrowing, while a margin call refers to the lenders calling in all of the money owed them through margin purchases. Thus, these stocks were risky to buy because they usually had no guarantee of stability or profit.
What does it mean to purchase a security on margin quizlet?
Purchasing on margin means borrowing some of the money used to buy securities. You do it because you desire a larger position than you can afford to pay for, recognizing that using margin is a form of financial leverage.
Which Bond type has the highest risk of default?
Junk bonds are bonds that carry a higher risk of default than most bonds issued by corporations and governments. A bond is a debt or promise to pay investors interest payments along with the return of invested principal in exchange for buying the bond.
What does the level of volatility in a market measure?
Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured as either the standard deviation or variance between returns from that same security or market index.
How is PPP useful?
Purchasing power parity (PPP) allows for economists to compare economic productivity and standards of living between countries. Some countries adjust their gross domestic product (GDP) figures to reflect PPP.
Which best explains what happens to the exchange rate of a floating currency?
Which of the following best explains what happens to the exchange rate of a floating currency? The exchange rate for that currency is determined by changes i. The exchange rate for that currency goes up and down with the. price of gold.