Which of the Following Statements Is Correct

question 81

Multiple Choice

Which of the following statements is correct?

• A)The discount rate is determined by market forces.
• B)The Fed's control over discount lending is more complete than its control over open market operations.
• C)Decisions by both banks and the Fed determine the volume of discount loans.
• D)The discount rate is typically greater than other short-term market interest rates.

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Definitions:

Unsystematic Risk

Unsystematic risk, also known as company-specific risk or idiosyncratic risk, is the type of uncertainty that comes with a company or industry that can be mitigated through diversification.

Weights

In finance, it refers to the proportional factors assigned to different components of a portfolio or capital structure.

Expected Return

The weighted average of all possible returns from an investment, accounting for the probability of each outcome.

Economic Scenarios

Hypothetical projections used to analyze the potential impact of different macroeconomic conditions on businesses or financial markets.