The Bank of Canada's Overnight Rate Target Corresponds Closely to the

question 77

Multiple Choice

The Bank of Canada's overnight rate target corresponds closely to the

• A) bank rate.
• B) prime business rate.
• C) federal funds rate in the U.S.
• D) market rate.
• E) T-bill ratE.

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Definitions:

Basis Points

One basis point is equal to 1/100th of 1%, used primarily to denote the change in interest rates, equity indexes, and the yield of fixed-income securities.

Price Decline

A decrease in the market price of an asset or security.

Duration

A measure of the sensitivity of the price of a bond or other fixed-income investment to a change in interest rates, often expressed in years.

Price Volatility

The rate at which the price of an asset increases or decreases for a given set of returns, indicative of the risk or stability.