If You Hear in the News That the Federal Reserve

question 108

Multiple Choice

If you hear in the news that the Federal Reserve conducted open-market purchases, then you should expect ______ to increase.

• A) reserve requirements
• B) the discount rate
• C) the money supply
• D) the reserve-deposit ratio

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Definitions:

Dividend

A part of a company’s profits given out to its shareholders, usually as cash or more shares.

ROE

Return on Equity; a measure of financial performance calculated by dividing net income by shareholder equity.

Dividend Growth Rate

The annualized percentage rate of growth of a company’s dividend payments.

Earnings

The amount of profit a company generates during a specific period, typically reported quarterly or annually.