Which of the Following Statements Is True

question 25

Multiple Choice

Which of the following statements is true?

• A)The annual income from securities far exceeds the annual expenditures of the Federal Reserve Bank.
• B)The Federal Reserve Bank's president is elected for a fourteen year renewable term.
• C)All banking services provided by the Federal Reserve Bank are free of charge.
• D)The Federal reserve Bank delegates its open market operations to smaller commercial banks.

---

Definitions:

Earnings Before Interest

Net income before interest expenses have been deducted; used to analyze the profitability of a company's core operations without the cost of borrowing.

Tax Rate

The percentage at which an individual or corporation is taxed by the government on the income or profit earned.

Optimal Capital Structure

The most favorable mix of debt and equity financing that minimizes a company's cost of capital and maximizes its stock price.

Tax Saving

Strategies or investments that reduce the amount of tax owed by taking advantage of allowable deductions, credits, or exemptions.