Which of the Following Tools of Monetary Policy Is Considered

question 245

Multiple Choice

Which of the following tools of monetary policy is considered the most important on a day-to-day basis?

• A) the discount rate
• B) the reserve ratio
• C) open-market operations
• D) paying interest on excess reserves

Understand the concepts of coupon rate, duration, and their impact on bond investment decisions.

Determine the inflation rate given nominal and real rates of return.

Calculate the duration of bonds and understand its implication on interest rate risk.

Understand the concept of interest rate risk and identify which bonds are more susceptible to it.

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