When a central bank increases bank reserves by $1, the money supply rises by more than $1. The amount of extra money created when the central bank increases bank reserves by $1 is called the money multiplier.

a. The money multiplier is generally greater than 1 because:

i. in a fractional-reserve banking system, each dollar bill is spent more than once (velocity is larger than 1), thereby increasing the money supply by more than $1.

ii. in a fractional-reserve banking system, each dollar of reserves can support more than one dollar of deposits, thereby increasing the money supply by more than $1.

iii. in a 100 percent reserve banking system, each dollar of reserves supports exactly one hundred dollars of deposits, thereby increasing the money supply by $100.

iv. when a central bank increases bank reserves by $1, deposits are automatically increased by $1 as well, thereby increasing the money supply by $2.

Monica needs to assess the slide sequence and make quick changes to it. which view should she use in her presentation program? a. outline b. slide show c. slide sorter d. notes page e. handout

The total value of your portfolio is $10,000: $3,000 of it is invested in stock a and the remainder invested in stock b. stock a has a beta of 0.8; stock b has a beta of 1.2. the risk premium on the market portfolio is 8%; the risk-free rate is 2%. additional information on stocks a and b is provided below. return in each state state probability of state stock a stock b excellent 15% 15% 5% normal 50% 9% 7% poor 35% -15% 10% what are each stock’s expected return and the standard deviation? what are the expected return and the standard deviation of your portfolio? what is the beta of your portfolio? using capm, what is the expected return on the portfolio? given your answer above, would you buy, sell, or hold the portfolio?

P11.2a (lo 2, 4) fechter corporation had the following stockholders’ equity accounts on january 1, 2020: common stock ($5 par) $500,000, paid-in capital in excess of par—common stock $200,000, and retained earnings $100,000. in 2020, the company had the following treasury stock transactions. journalize and post treasury stock transactions, and prepare stockholders’ equity section. mar. 1 purchased 5,000 shares at $8 per share. june 1 sold 1,000 shares at $12 per share. sept. 1 sold 2,000 shares at $10 per share. dec. 1 sold 1,000 shares at $7 per share. fechter corporation uses the cost method of accounting for treasury stock. in 2020, the company reported net income of $30,000. instructions a. journalize the treasury stock transactions, and prepare the closing entry at december 31, 2020, for net income. b. open accounts for (1) paid-in capital from treasury stock, (2) treasury stock, and (3) retained earnings. (post to t-accounts.) c. prepare the stockholders’ equity section for fechter corporation at december 31, 2020.