____ is the rate that applies when banks borrow and lend reserves to one another.
A)The repo rate
B)The discount rate
C)The coupon rate
D)The federal fund rate

Question

Quizplus · Accepted Answer

The federal funds rate is the rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. This rate is often used as a benchmark for interest rates on other types of loans and securities. The other options, such as the repo rate, discount rate, and coupon rate, all refer to different types of interest rates that are not directly related to interbank lending.

____ Is the Rate That Applies When Banks Borrow and Lend