To Reduce the Overnight Lending Rate, the Bank of Canada

question 146

Multiple Choice

To reduce the overnight lending rate, the Bank of Canada can:

• A)buy government bonds from the chartered banks.
• B)increase the bank rate.
• C)increase the prime interest rate.
• D)sell government bonds to chartered banks.

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Definitions:

Stock Split

An action by a company to divide its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of the company does not change.

Market Value

The current price at which an asset or service can be bought or sold in an open market.

Treasury Stock

Shares of a company's own stock that it has reacquired from shareholders and held in the company's treasury, reducing the amount of outstanding stock.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing shareholders' ownership interest.