Which of the following statements is false?
A)Under the Primary Dealer Credit Facility (PDCF), primary dealers can borrow from the Fed similar to the way in which banks can borrow from the Fed at the discount window.
B)The creation of the Primary Dealer Credit Facility (PDCF) marks the first time nonbanks can borrow from the Fed.
C)The Primary Dealer Credit Facility (PDCF) allows primary dealers to borrow overnight funds from the Fed without collateral.
D)The Primary Dealer Credit Facility (PDCF) is designed to increase liquidity and to provide support for the financial system.

Question

Quizplus · Accepted Answer

The statement that primary dealers can borrow overnight funds from the Fed without collateral is false. The Primary Dealer Credit Facility requires collateral in the form of a range of securities, including Treasury, agency, and agency mortgage-backed securities.

Which of the Following Statements Is False