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All main topics / Finance & Investment / Derivatives / Derivatives
10.Which of the following is true of the fed funds rate
A.It is the same as the Treasury rate
B.It is an overnight interbank rate
C.It is a rate for which collateral is posted
D.It is a type of repo rate

Answer: B

At the end of each day some banks have surplus reserves on deposit with the Federal Reserve others have deficits. They use overnight borrowing and lending at what is termed the fed funds rate to rectify this.

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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015




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