Answer: Option (A) is correct.
Explanation:
Correct option: Securities; loans to financial institutions
Securities and loans given to the financial institutions are the assets for the federal reserve.
Fed also uses securities as an instrument for a monetary policy that is under the open market operations. In open market operations, there is a buying and selling of government securities. If fed wants to contract the money supply then it sells government securities to the public, as a result money supply decreases.
The loans that are given to the banks are also an asset for the federal reserve. Interest is also received on these loans from the financial institutions.
