In Canada

question 118

Multiple Choice

In Canada

• A)the M1 multiplier is less than the M2 multiplier.
• B)the money multiplier increases when the desired reserve ratio increases.
• C)the money multiplier increases when the currency drain ratio increases.
• D)the M1 multiplier decreases over time.
• E)the M2 multiplier decreases over time.

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Definitions:

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to a change in interest rates, often indicating the bond's price volatility.

Coupon

The interest rate stated on a bond when issued, which is typically paid at regular intervals until maturity.

Target Date Immunization

A strategy used in fixed-income portfolio management where the portfolio is structured to become immune to interest rate changes as it reaches a specified date.

Horizon Analysis

A method used in finance to evaluate investments by forecasting their returns or performance over a specific future period.