Which of the following statements is true about federal funds?
A) Federal funds offer loans at a coupon rate that is two times the market interest rate.
B) Federal funds have very long maturities, often 3 years or more.
C) Federal funds offer loans to the state government to meet the reserve requirements of the federal government.
D) Federal funds are used to repay the T-bills issued by the federal government.
E) Federal funds are used by banks to meet the reserve requirements of the Federal Reserve.
Correct Answer:
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