From Time to Time, the Federal Reserve Buys Back Government

question 44

Multiple Choice

From time to time, the Federal Reserve buys back government bonds from the private sector through a process called

• A) bond recall procedures.
• B) open market purchases.
• C) backflip bond investments.
• D) voluntary redemption procedures.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders.

Partial Equity Method

An accounting approach where an investor recognizes income from its investment in an associate to the extent of dividends received, differing from the full equity method which recognizes income as it's earned by the associate, regardless of dividends received.

Fair Value

The exchange value of an asset or the settlement cost of a liability in a well-arranged transaction with participants in the market on the measurement occasion.

Book Value

The net value of a company's assets minus its liabilities, often used as a measure of the company's worth.