The Policy Tool of Changing Reserve Requirements Is

question 14

Multiple Choice

The policy tool of changing reserve requirements is

• A)the most widely used.
• B)the preferred tool from the bank's perspective.
• C)no longer used.
• D)still used,even with its disadvantages.

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Definitions:

Mutual Funds

Funds that aggregate capital from numerous investors to acquire a varied collection of shares, bonds, or alternative financial instruments.

12b-1 Fee

A fee found in the expense ratio of some mutual funds, meant to cover marketing, distribution, and other costs.

Front-end Load

An upfront sales charge investors pay when they purchase mutual fund shares, which reduces the amount of the investment.

Back-end Load

A fee paid by investors when selling mutual fund shares, typically decreasing over time the longer shares are held, designed to discourage quick withdrawals.