Which of the following is true?
A)Primary dealers can now borrow overnight from the Fed.
B)The Fed auctions government securities to primary dealers for a 28-day or long period in exchange for less liquid and less credit-worth securities.
C)The Commercial Paper Funding Facility (CPFF) supports the commercial paper market by purchasing commercial paper.
D)All of the above are true.

Question

Quizplus · Accepted Answer

All the statements are true. Primary dealers can borrow overnight from the Federal Reserve through certain facilities. The Fed does auction government securities to primary dealers, often in exchange for less liquid and less creditworthy securities, as part of its open market operations and liquidity support measures. The Commercial Paper Funding Facility (CPFF) was established to support the commercial paper market by purchasing commercial paper directly, providing a liquidity backstop to issuers of commercial paper.

Which of the Following Is True