If the Federal Open Market Committee (FOMC) Decides to Expand

question 157

Multiple Choice

If the Federal Open Market Committee (FOMC) decides to expand the money supply, then:

• A)​it will issue directions to sell U.S.government securities, thus increasing the velocity of circulation of the money supply.
• B)​it will issue directions to purchase U.S.government securities, thus putting more reserves in the hands of banks.
• C)​it will order new Federal Reserve notes delivered to member banks.
• D)​it will raise the discount rate to member banks.

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Definitions:

Historical Standard Deviation

It measures the variability or dispersion of historical returns of an investment around its average return over a certain period, indicating the investment's risk level.

Expected Return

The predicted average return on an investment calculated by adding together all possible returns weighted by the likelihood of each occurring.

Asset Allocation Strategy

A method of investment where an individual divides their investment portfolio among various asset categories, such as stocks, bonds, and cash, to optimize risk and return.

Go Global

A strategy or approach aimed at expanding business operations internationally to access larger markets and opportunities.