The Federal Reserve System

question 15

Multiple Choice

The Federal Reserve System

• A) was recently declared unconstitutional by the Supreme Court.
• B) has officers that are elected, like members of Congress.
• C) controls the amount of currency in circulation.
• D) is headquartered in San Francisco.

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Definitions:

Interest Rate Collar

A financial derivative strategy used to hedge against interest rate fluctuations by setting upper and lower bounds on interest rates.

Variable Rate

An interest rate that can change over the period of a loan or mortgage based on underlying benchmark interest rates or indices.

Financial Risk Management

The method of safeguarding a company's economic value through the utilization of financial tools to control exposure to risks, notably market risk and credit risk.

Risk Profiles

Descriptions of an individual's or organization's willingness to take risks, as well as the threats to which they are exposed.