Open Market Operations Refer to the Purchase or Sale of ________

question 40

Multiple Choice

Open market operations refer to the purchase or sale of ________ to control the money supply.

• A)corporate bonds and stocks by the Federal Reserve
• B)U.S.Treasury securities by the Federal Reserve
• C)corporate bonds and stocks by the U.S.Treasury
• D)U.S.Treasury securities by the U.S.Treasury

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Definitions:

Net Cash Inflow

The surplus of cash revenues over cash expenses in a given period, indicating the liquidity added to an entity.

Useful Life

The estimated duration for which an asset is expected to be functional and economically feasible for its intended purpose.

Annual Operating Income

The profit earned from a firm's normal core business operations, excluding deductions of taxes and interest charges.

Average Rate of Return

A financial metric used to estimate the profitability of an investment, calculated by dividing the average annual profit by the initial investment cost.