Initial Margin Requirements Are Determined by

question 27

Multiple Choice

Initial margin requirements are determined by

• A)the Securities and Exchange Commission.
• B)the Federal Reserve System.
• C)the New York Stock Exchange.
• D)the Federal Reserve System and the New York Stock Exchange.

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Definitions:

Federal Reserve System

An alternative term for the Federal Reserve, emphasizing its structure as a network of 12 Federal Reserve Banks serving as the nation's central bank.

Monetary Policy

The process by which the central bank or monetary authority of a country controls the supply of money, often targeting an inflation rate or interest rate to ensure price stability and general trust in the currency.

Elastic Currency

A currency system that can expand or contract in supply to accommodate economic needs and stabilize the economy.

Secondary Reserves

Liquid assets held by financial institutions that are not used for primary obligations but can be quickly converted to cash for emergency needs.