1) Monetary policy - Monetary policy is concerned with the Canadian standard of living. The Bank's mandate is to keep the economy on a slow, stable, steady expansion.

2) Currency in circulation - The Bank of Canada is responsible for the currency notes which are circulating in the Canadian economy. The Bank deals with crimes of counterfeiting because part of its job is to maintain the integrity of our currency.

3) Central banking services - The Bank of Canada is the banker for the federal government and other financial institutions. The Bank operates in the Canadian money markets every day. Monetary policy is implemented through these open market operations.

4) Debt management - The Bank of Canada acts as the government's fiscal agent. As their fiscal agent they are the advisor to the federal government on debt matters.

2) What is the money market?

The money market is where short term borrowers and lenders come together. Some examples of investments traded in the money market are Treasury Bills, Commercial Paper and Bankers Acceptances.

3) What are the different types of business cycle indicators?

Business cycle indicators include leading, lagging and coincident. A leading indicator anticipates economic changes and moves before the economy changes. A lagging indicator moves after the economy. A coincident indicator changes at the same time and directly with the economy.

4) What is the most profitable strategy for an investor holding a portfolio of cash and fixed income investments, if interest rates are expected to rise or fall?

An investor would adjust the duration of the portfolio. If interest rates are expected to rise, an investor would shift to short term bonds and money market instruments in order to minimize capital losses and to profit from the rise in interest rates. If interest rates are expected to drop, which would raise bond prices, an investor would maximize portfolio returns by purchasing long term bonds which is known as lengthening the duration of the portfolio.