As a Result of the Financial Crisis, the Fed Has

question 148

Multiple Choice

As a result of the financial crisis, the Fed has begun buying securities in troubled markets, as it has been trying to provide more credit to the markets and thereby mitigate the crisis. This is known as

• A)Quantitative easing.
• B)FOMC.
• C)Credit crunching.
• D)Market deepening.
• E)Market thinning.

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Definitions:

Yield To Maturity

The cumulative income projected from a bond, provided it is retained till its expiration, factoring in both the interest disbursements and principal reimbursement.

Rate Of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment's cost.

Par Value

The face value of a bond or stock, which is the amount paid back to the bondholder at maturity.

Coupon Bond

A type of bond that pays the holder a fixed interest rate (coupon rate) over the bond's lifetime and repays the principal at maturity.