In: Finance
A(n) ______ is a simplified balance sheet.
asset account |
||
T - account |
||
bank account |
_____ has the key advantage that it is readily understood by the public and is highly transparent.
The reserve rule |
||
Inflation targeting |
||
Prime rate targeting |
||
Discount rate targeting |
The interest rate the Fed charges other banks for loans is the ______ rate and the interest rate on over night loans from one bank to another bank is the ______ rate.
federal funds; discount |
||
reverse repo; repo |
||
discount; federal funds |
||
mortgage; collateral loan |
||
all of the above |
A ______ is a simplified balance sheet.
Answer : Bank Account
Reason :
A bank account is an arrangement with a bank which allows you to keep your money in the bank and to take some out when you need it.An agreement between a bank and a person or institution, whereby the bank agrees to hold money and/or other assets on behalf of the other party. What the holder may do with those assets depends upon the nature of the account. In a checking account or a savings account, the bank holds money and pays the client a certain percentage in interest. This payment gives the bank the right to lend the money to other clients or invest it within the confines of law and banking regulations. However, the client has the right to withdraw the total amount of money on demand.
_____ has the key advantage that it is readily understood by the public and is highly transparent.
Answer : Inflation trading
Reason :
An inflation trade is an investing strategy or trading method that seeks to profit from rising price levels influenced by inflation or expectations of coming inflation. Inflation trades are common in times of rising price inflation or in times when investors expect the Fed to change rates significantly over the coming months. Inflation trades can refer to the shifting of portfolio assets, or it may also refer to speculative trades involving assets highly susceptible to price inflation such as the dollar, gold or silver.
The interest rate the Fed charges other banks for loans is the ______ rate and the interest rate on over night loans from one bank to another bank is the ______ rate.
Answer : Federal funds and discount rates
Reason :
Federal funds, often referred to as fed funds, are excess reserves that commercial banks and other financial institutions deposit at regional Federal Reserve banks; these funds can be lent, then, to other market participants with insufficient cash on hand to meet their lending and reserve needs. The loans are unsecured and are made at a relatively low interest rate, called the federal funds rate or overnight rate, as that is the period for which most such loans are made.