Question

Which statement is TRUE? A The Discount Rate is higher than the Prime Rate B The...

Which statement is TRUE?

A The Discount Rate is higher than the Prime Rate

B The Fed Funds Rate is higher than the Call Loan Rate

C The Fed Funds Rate is higher than the Discount Rate

D The Prime Rate is higher than the Fed Funds Rate

3. The term "dovish" monetary policy means that:

A the Federal Reserve is loosening credit by lowering interest rates

B the Federal Reserve is tightening credit by raising interest rates

C Congress is stimulating economic growth by increasing government spending

D Congress is curbing economic growth by decreasing government spending

4. Which action would NOT help a client diversify his or her portfolio?

A Buying bonds in a portfolio that have different credit ratings

B Buying stocks in a portfolio in accounts held at different broker-dealers

C Buying an index fund that invests solely in domestic securities and another index fund that invests solely in foreign securities

D Buying a target date mutual fund based on the customer’s investment objectives and investment time horizon

Homework Answers

Answer #1

1 Statement d is True. I. e prime rate are always higher than fed fund rates by normally 3%.

3.Dovish meaning is A i. e federal Reserve is loosening credit by lowering interest rate . This is because it is believed that lowering interest rate will increase the health of economy.

4 Answer is C I. e buying an index fund that solely invest in domestic securities.

Diversified Portfolio means we should not keep all eggs in 1 basket I. e should invest in different shares, bond etc.

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