An Open Market Sale of Securities Will Tend to Cause

question 43

Multiple Choice

An open market sale of securities will tend to cause

• A)a reduction in the supply of central bank money.
• B)a reduction in the demand for currency.
• C)a reduction in the demand for reserves.
• D)none of the above

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Definitions:

Held-to-Maturity Securities

Financial assets purchased with the intention of holding them until they mature; commonly bonds or other debt securities.

Dividend Yield

The ratio of a company's annual dividend payments to its share price, representing the return on investment a shareholder receives from dividends alone.

Preferred Stock

A type of stock that gives shareholders preference over common stockholders in the distribution of dividends and assets upon liquidation.

Common Stock

Equity securities representing ownership in a corporation, providing voting rights and sharing in the profits through dividends.