The Fed Holds Its Euro Reserves Primarily in the Form

question 23

Multiple Choice

The Fed holds its euro reserves primarily in the form of:

• A)Euro currency
• B)A weighted portfolio of European government bonds
• C)German government bonds
• D)International mutual funds

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Definitions:

Financial Leverage

The action of using debt to magnify the expected return on an investment.

Operating Income

Income from a company's main business activities, excluding deductions for interest and taxes, showing the profitability from core operations.

ROE

Return On Equity, a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how efficiently a company uses investments to generate earnings growth.

EPS

Earnings per share, a company's net profit divided by the number of its outstanding shares, indicating profitability.