The Single-A and Triple-B Bonds Are Strong Enough to Be

question 133

Multiple Choice

The Single-A and triple-B bonds are strong enough to be called _______________, and they are the lowest-rated bonds that many banks and other institutional investors are permitted by law to hold.

• A) Investment grade bonds
• B) Public service bonds
• C) Floating rate bonds
• D) Coupon bonds

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Definitions:

Money Supply

The entire stock of currency and other liquid instruments circulating in a country's economy as of a particular time.

Fed

Short for the Federal Reserve System, it's the central banking system of the United States, responsible for monetary policy, including regulating banks, managing inflation, and influencing interest rates.

Reserve Requirement

The minimum amount of reserves that a bank must hold against its deposits, as mandated by central banking authorities to ensure liquidity.

Discount Rate

The rate of interest applied to loans given to commercial banks and other financial institutions by their local Federal Reserve Bank's credit facility.