If You Deposit $100 of Currency into a Demand Deposit

question 119

Multiple Choice

If you deposit $100 of currency into a demand deposit at a bank, this action by itself

• A) does not change the money supply.
• B) increases the money supply.
• C) decreases the money supply.
• D) has an indeterminate effect on the money supply.

---

Definitions:

Realized Compound Yield

The reflective measurement of the total returns on an investment, factoring in compounding interest or returns over a specified time frame.

Coupon Rate

The yearly rate of interest that the entity issuing a bond pays to the bondholders, represented as a percentage of the bond's principal value.

Yield To Maturity

The expected rate of return on a bond if held until its maturity date, reflecting both interest payments and any gain or loss if the bond was purchased at a discount or premium.

Convertible Bonds

Bonds that can be converted into a predetermined number of the issuer's equity shares at certain times during the bond's life, usually at the discretion of the bondholder.