Which of the Following Is True? Choose One)

question 3

Multiple Choice

Which of the following is true? choose one)

• A) Both forward and futures contracts are traded on exchanges.
• B) Forward contracts are traded on exchanges, but futures contracts are not.
• C) Futures contracts are traded on exchanges, but forward contracts are not.
• D) Neither futures contracts nor forward contracts are traded on exchanges.

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Definitions:

Reserve Ratio

The fraction of depositors' balances that banks must have on hand as cash, a requirement determined by the central bank.

Money Multiplier

The mechanism by which the base money supply is expanded through the banking system's ability to lend and create deposits.

Reserve Ratio

The portion of depositors' balances that banks must have on hand as cash.

Bank Leverage

The ratio of a bank's total debt to its equity capital, indicating the extent to which bank funding is used to finance its assets.