Final answer:
The Correct option is 4). The largest asset on the Federal Reserve's balance sheet is securities, not gold, repurchase agreements, or assets like silver and bitcoin. U.S. Treasury and mortgage-backed securities make up the bulk of the Fed's assets, with total assets exceeding $8 trillion as of the end of 2021.
Step-by-step explanation:
The largest asset on the Federal Reserve's balance sheet, by far, is securities, specifically U.S. Treasury and mortgage-backed securities. The Federal Reserve holds a significant amount of these government-issued bonds, which are considered low-risk because the U.S. government has a strong track record of paying off its debts. Unlike gold, which does hold considerable value, the vast majority of assets held by the Fed come in the form of these securities. Furthermore, items like silver or bitcoin are not part of the traditional balance sheet items for the Fed. As of the end of 2021, total Fed assets exceeded $8 trillion, which had expanded rapidly from $4 trillion in February 2020 due to measures like quantitative easing in response to the pandemic.