Traditionally, the Fed Often Communicated Its Intentions to Restrict or Expand

question 59

Multiple Choice

Traditionally, the Fed often communicated its intentions to restrict or expand monetary policy by announcing a change in its target for the

• A) prime rate.
• B) federal funds rate.
• C) discount rate.
• D) consumer price index.

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Definitions:

Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Capital Gains Yield

The percentage increase in the market price of an asset over time, excluding dividends.

Annual Dividend

The total dividend payments issued to shareholders by a company in a year.

Risk Premium

The return in excess of the risk-free rate of return that an investment is expected to yield, compensating investors for taking on additional risk.