Federal Reserve float is defined as
A)the excess of total deposits by depository institutions over required reserves.
B)the liquid funds the Fed has available to lend to banks.
C)cash items in the process of collection minus deferred availability cash items.
D)deferred availability cash items minus cash items in the process of collection.

Question

Quizplus · Accepted Answer

Federal Reserve float is the difference between cash items in the process of collection (checks and other types of payments that have been deposited but have not yet cleared) and deferred availability cash items (checks and other types of payments that have been paid but are not yet available for withdrawal). This difference represents temporary funds that the Federal Reserve can use to make loans to banks or invest in securities.

Federal Reserve Float Is Defined as