Define Risk and Probability

question 142

Essay

Define risk and probability.Briefly describe the two types of probability.

Grasp how changes in reserve requirements impact the banking system and the money supply.

Analyze the implications of open market operations on banking activities and the money supply.

Understand the determinants and impacts of the discount rate and federal funds rate.

Recognize the role of excess reserves in the banking system and their impact on the money supply.

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Definitions:

Dividend Yield

A financial ratio that shows how much a company pays out in dividends each year relative to its stock price, typically expressed as a percentage.

Price/earnings Ratio

A valuation metric for companies, calculated as the market value per share divided by the earnings per share.

Excess Cash

Refers to the amount of cash held by a company that exceeds the normal operational needs, often indicating a potential for investment, distribution to shareholders, or acquisition.

Dividend

A part of a company's profits distributed to its shareholders, usually four times a year.