During the Stock Market Crash of October 1987, the Fed

question 89

Multiple Choice

During the stock market crash of October 1987, the Fed

• A)raised the discount rate.
• B)raised reserve requirements.
• C)increased lending to member banks.
• D)sold government securities.

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Definitions:

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer, typically not related to its market value.

Yield

The income return on an investment, such as the interest or dividends received, expressed as an annual percentage rate based on the investment's cost or current market value.

Zero-Coupon Bond

A bond that does not pay periodic interest and is sold at a significant discount to its face value, which is paid at the bond's maturity.

Yield To Maturity

The total return anticipated on a bond if it is held until it matures, including both interest payments and the gain or loss incurred if purchased at a price different from its face value.