Open Market Operations Differ from Discounting Operations in That They

question 103

Multiple Choice

Open market operations differ from discounting operations in that they are

• A) initiated by member depository institutions.
• B) designed to be of significance only to large city banks.
• C) initiated by the Federal Reserve.
• D) initiated by the U.S. Treasury.

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Definitions:

Democratic Experiment

Refers to the practice or trial of democratic governance systems, often highlighting the novel or evolving nature of democracy.

Callable Bond

A callable bond is a financial instrument that allows the issuer to pay off the bond prior to its due date.

Call Provision

A clause in a bond or other fixed-income security that allows the issuer to repurchase and retire the debt before its maturity date.

Coupon Rate

The interest rate stated on a bond, which is the percentage of the bond's face value that is paid out annually as interest to the bondholder.