____ ensures that the rates on the various money market instruments move together.
A) Purchase funding
B) Russian roulette
C) Lagged reserve requirements
D) Arbitrage
E) None of the above

Question

Quizplus · Accepted Answer

Arbitrage ensures that the rates on various money market instruments move together by taking advantage of price differences between markets. Traders will buy a security in one market where the price is low and sell it in another where the price is higher, which helps to equalize prices and rates across different markets.

____ Ensures That the Rates on the Various Money Market