Which of the Following Is an Asset of the Fed

question 565

Multiple Choice

Which of the following is an asset of the Fed?

• A) mortgage-backed securities
• B) currency
• C) reserves of depository institutions
• D) Both answers B and C are correct.

---

Definitions:

Risk Aversion

The tendency of investors to prefer lower risk in investment choices, reflecting a preference for certainty over uncertainty.

Lower-risk Securities

Investment products that are considered to have a lower potential for loss or volatility, such as government bonds or CDs.

Tolerance for Risk

An individual's or entity's capacity to endure the uncertainty and potential loss in investment values.

Beta

A statistical measure evaluating the relative risk of an investment by comparing its volatility to that of the broader market.