The interest rate commercial banks charge each other on overnight loans is called the:
A) prime rate.
B) Federal Funds rate.
C) discount rate.
D) Treasury bill rate.

Question

Quizplus · Accepted Answer

The interest rate commercial banks charge each other on overnight loans is called the Federal Funds rate. The prime rate is the interest rate banks charge their most creditworthy customers. The discount rate is the interest rate the Federal Reserve charges member banks for loans. The Treasury bill rate is the interest rate on short-term U.S. government debt.

The Interest Rate Commercial Banks Charge Each Other on Overnight