An Important Routine Function of the Bank of Canada Is

question 230

Multiple Choice

An important routine function of the Bank of Canada is:

• A)to help new chartered banks sell capital stock.
• B)to supply the economy with paper currency.
• C)to advise chartered banks as to the most profitable ways of reinvesting profits.
• D)to help chartered banks develop correspondent relationships with foreign banks.

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Definitions:

Prospectus

A document disclosing the details of a security and the underlying business to prospective investors.

Indenture

Contractual agreements associated with bonds that limit the activities of the issuing companies. The limitations are designed to reduce the risk that the firm won’t be able to pay the bond’s interest and principal.

Issue New Securities

The process by which a company or other entity offers new stocks or bonds for sale to investors to raise capital.

Investment Banks

Financial institutions that provide services such as underwriting, acting as intermediaries in mergers and acquisitions, and providing financial advisory services to companies.