Accounts
What are the two basic bank accounts
Checking & Savings
Define interest
money paid regularly at a particular rate of a certain amount of money
What is the Dual Mandate and its' criterion?
the FED's mission to keep inflation at 2%, and unemployment at 4%
Inflation increases
Name 3 different asset classes
Ect
Out of these, which has the LEAST liquidity: Checking, Savings, Money Market, High Yield Savings, and CDs.
Certificate of Deposits (CDs)
What is the difference between APR and APY
APR- interest which you owe, APY- interest which you gain
Who is the current chairman of the FED?
Jerome Powel
What type of policy should be used when there is a recession to bring back economic growth
expansionary policy
Difference between stock and bond
ect
What rule limits the number of times you can withdraw from savings accounts? And how much a month?
assuming a 10% APY on an $1000 dollar investment, how much will you gain in 2 years?
$1,210
How many regional federal reserve banks are there throughout the US?
12
How does raising interest rates affect unemployment
unemployment increases
What are the 3 financial statements
Income statement, balance shseet, cash flow statement
What is the difference between a high-yield savings account and a money market account?
A money market account has a fluctuating interest rate while a high-yields is fixed
A bank is advertising a $100 8% APY Certificate of Deposit for 3 months. What is the actual interest on the CD?
2%, $2 net gain
What are the 3 tools of the FED?
Open Market Operations, Federal Funds Rate, Reserve Requirements
Money supply decreases, inflation drops
Given that stock X has a market price of $100. And a put option is purchased with a strike price (K) at $90 with a premium (p) of $15.
What is the option's profit at time (t) when the price of stock X is $60
K - S(t) - p = $15.00
What crisis was the FDIC created in response to?
The great depression
A bank is advertising a $100 8% APY Certificate of Deposit for 3 months. What is the actual interest on the CD?
2%
What sort of policy did the FED perform during the 2008 recession?
Quantatative Easing/Expansionary Policy
What happens to unemployment when the FED buys bonds?
What happens to a discounted bond's value when maturity is reached?
Bond price returns to the par value.