The Settlement Balances Rate Is the

question 90

Multiple Choice

The settlement balances rate is the

• A)proportion of outstanding loans from chartered banks that are resolved.
• B)interest rate that the Bank of Canada charges the big banks on loans.
• C)interest rate paid to chartered banks on their reserves held at the Bank of Canada.
• D)ratio of the value securities sold by the Bank of Canada to securities outstanding.
• E)proportion of overnight inter-bank loans that are resolved.

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Definitions:

Required Rate of Return

The minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular project or investment.

Negative NPV

A situation where the present value of future cash flows of an investment is less than the initial investment cost, indicating a potential loss.

Project Risk

The potential for loss or failure associated with an investment or business initiative.

Dividend Growth Model

A valuation method used to estimate the price of a company's stock by using predicted dividends and discounting them back to present value.