If You Hear in the News That the Bank of Canada

question 95

Multiple Choice

If you hear in the news that the Bank of Canada conducted open-market purchases, then you should expect _____ to increase.

• A)reserve requirements
• B)the discount rate
• C)the money supply
• D)the reserve-deposit ratio

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Definitions:

Normally Distributed Returns

Returns on investment that follow a bell-shaped curve, indicating that most of the returns are concentrated around the mean.

Standard Deviation

A measure of the dispersion of returns for a given security or market index, indicating the degree of volatility.

Passive Investment Strategies

Investment strategies that involve minimal buying and selling, often mirroring an index.

Active Trading Strategies

Investment strategies that involve frequent transactions, aiming to exploit short-term price movements to achieve profit.