To weaken the dollar using sterilized intervention, the Fed would ____ dollars and simultaneously ____ Treasury securities. A. buy; sell B. sell; sell C. sell; buy D. buy; buy

Q: The process of fixing the price of securities in the financial market is based on which of the…

A: Solution: A financial market is market where people trade financial securities and derivatives. This…

Q: Securities exchanges create efficient markets that do all of the following EXCEPT

A: Because there are primary markets and Secondary Markets which investors have to take the opportunity…

Q: Identify under which one of the following market the issue of treasury bills lies: a. Equity Market…

A: A Treasury Bill (T-Bill) is a short-term U.S. government debt

Q: All of the following about a firm-commitment underwriting is true EXCEPT the investment banker…

A: Firm commitment underwriting refers to the underwriter accepting to purchase all the securities from…

Q: Hedging is a risk management strategy that is used in limiting or offsetting probability of loss…

A: Financial risk managers analyse the market trend and accordingly take financial decisions.Roles and…

Q: To force the value of the British pound to depreciate against the dollar, the Federal Reserve…

A: Foreign exchange fluctuations are based on supply and demand for the currency in the exchange market…

Q: At any given time, the bank will purchase foreign exchange currency at what cost?  a. market price…

A: Standard Disclaimers“Since you have asked multiple question, we will solve the first question for…

Q: Which of the following investment types cannot be sold during normal market hours? a) mutual fund…

A: Investment is a process of investing money with the motive of making more money.  The person who…

Q: Assuming the government is selling a government bond to fight COVID-19, and at the same time,…

A: Bonds are debt instruments that are issued by the borrowing organizations. Bonds can be issued to…

Q: The least risky capital market security is a. preferred stock. b. common stock. c. corporate bonds.…

A: As per Bartleby Honor Code, when multiple questions are asked, the expert is required only to solve…

Q: Which of the following facilitates trading of short term corporate bonds in an economy? Select one:…

A: Short term corporate bonds are issued by government and companies for short term financing…

Q: Match the risk with the correct transaction (if any): v The DC appreciates, altering relative prices…

A: The appreciation of domestic currency means that more unit of foreign currency can be purchased from…

Q: To strengthen the dollar using sterilized intervention, the Fed would ____ dollars and…

A: Sterilized intervention is the purchase or sale of foreign currency by a central bank in order to…

Q: Which of the following statements is false? A.   The sovereign credit rating is a risk of a…

A: A bond is an fixed market instrument that carries less risk than equity.  To check creditworthiness…

Q: The principle device used by the corporation to force conversion A. is a call provision. B. is…

A: Concept of call Provision : Call provision is a clause or condition on bonds that allows the issuer…

Q: Which of the following is the basis for fixing the price of securities in the financial market? a.…

A: Securities are first issued in primary market with the launch of Initial Public Offer (IPO). Later,…

Q: For each of the following definition select the correct term Definition Term A time draft payable to…

A: The type of bonds which can be converted into common stock after some specified time is known as…

Q: If the Federal Reserve Bank (FRB) announces a change by increasing the Federal Funds rate, this will…

A: Federal Interest rate and Bond price have an inverse relationship. Bond price and yield to maturity…

Q: According to the efficient market, which of the following are not true?   Select one: securities…

A: Efficient market hypothesis is a hypothesis that states that markets are efficient and returns…

Q: offer savers a safer, more liquid investment than a capital market security, even though the…

A: Financial intermediaries are professional firms who have knowledge and expertise and experience so…

Q: If a bank manager wants to protect the bank against losses that would be incurred on its portfolio…

A: If a bank manager wants to protect the bank against losses that would be incurred on its portfolio…

Q: nternational Investments U.S.-based MNCs commonly invest in foreign securities. Assume that the…

A: If the investors are expecting , dollar would be stronger in the future, it will discourage then to…

Q: bank manager wants to protect the bank against losses that would be incurred on its portfolio of…

A: bank manager wants to protect the bank against losses that would be incurred on its portfolio of…

Q: Assess the following statement: I. Money markets exist to help reduce the opportunity cost of…

A: Dealing in debt with a maturity of less than one year is referred to as the money market.…

Q: An investor in the common stock of companies in a foreign country may wish to hedge against the…

A: In a forward contract, any underlying asset can be bought or sold at a specified rate on a specified…

Q: STRIPS are:   a) Government-backed schemes that allow investors to hedge against market risk.…

A: STRIPS (Separate Trading of Registered Interest and Principal Securities) was established to give…

Q: Using Currency Futures: a. How can currency futures be used by corporations? Give appropriate…

A: a) Currency futures can be used by corporations for hedging their foreign currency exposures.…

Q: Based upon risk, which of the following financial assets is likely to have the highest required rate…

A: Option A: Corporate Bond:  A corporate bond is less risky as return on investment is guaranteed.…

Q: Nominal interest rates are the rates stated or quoted in the terms or contract of a particular…

A: Real interest rate is the rate that shows the actual cost of borrowing to the borrower by removing…

Q: The role of risk managers is to: A. Make prophetic forecasts C. Produce a point estimate of the…

A: There are various types of risks that are associated with the business; some of them are…

Q: Which of the following is an example of a systematic risk?     Bond investor invests in a Japanese…

A: U.S government announces an increase in corporate tax rate

Q: The Federal Reserve decreases the federal funds rate     U.S. government announces an increase in…

A: Specific risk are those risk which are associated with to a specific industry or specific group of…

Q: f the Bank of England wanted to discourage investment sp ggregate demand, it could Select one: O a.…

A: Bank of England do open market operations to implement the policies regarding the economy and growth…

Q: ____ occurs when a firm calls a relatively high interest rate issue and replaces it with a lower…

A: There are different concepts in bonds

Q: If a bank manager wants to protect the bank against losses that would be incurred on its portfolio…

A: The bank manager is afraid of an interest rate rise. In order to protect from the losses, the bank…

Q: assuming the government is selling a government bond to fight COVID-19, and at the sa,e time…

A: The question is based on the concept as comparison between corporate bond and government bond for…

Q: are the rates stated or quoted in the terms or contract of a particular security. Which is false…

A: Nominal interest rate of bond or any security has many components risk free rate, inflation premium,…

Q: investment banker does not overvalue (over price) or undervalued (under price) the securities? If…

A: It is very important that investment banker should value the securities properly in terms of…

Q: Conventional versus Unconventional Monetary Policy Discuss the key ideas in Neo-Fisherism. Discuss…

A: Answer:- a Key ideas Neo-Fisherism:- The basic Neo-Fisherian theory is that central banks may…

Q: ssuming the government is selling a government bond to fight COVID-19, and at the same time, ASHANTI…

A: Step 1 A bond is a debt commitment. When investors purchase corporate bonds, they are effectively…

Q: According to the efficient market, which of the following are not true?   Select one: securities…

A: Efficient market :-   The efficient market is an Financial theory that endeavors to clarify how…

Q: The process of fixing the price of securities in the financial market is based on which of the…

A: The price of securities in the financial markets are volatile in nature. There are both buyers and…

Q: Investment Banks operate and earn profits by:   a) Purchasing undervalued securities on the market…

A: The answer is option f). None of the other answers.

Functions of the Federal Reserve System

The Federal Reserve System looks after the financial activities and operations of the banking system. It is the apex body that has complete control over the banking regulations. All the guidelines regarding the banking system, money supply, and formulation of the monetary policy come under the purview of the Federal Reserve System. The New York Fed also helps in drafting the monetary policy and supervising the financial system.

Elastic and Inelastic Markets

Measuring the change in percentage of an economic variable with respect to change in a different economic variable is known as elasticity. This change in percentage results in a change in price concerning changes in other factors. In simple terms, when one factor brings a change to another factor, it is called elasticity.