If LVTS participating financial institutions have insufficient settlement balances ________.
A) they can borrow from each other in the pre-settlement trading period
B) they can borrow from the Bank of Canada
C) they can borrow from the Bank of Canada at the prime rate
D) Only A and B of the above.

Question

Quizplus · Accepted Answer

LVTS participating financial institutions can borrow from each other in the pre-settlement trading period or from the Bank of Canada. Therefore, options A and B are both correct, whereas option C is not accurate as the Bank of Canada may charge a different interest rate than the prime rate for such borrowing.

If LVTS Participating Financial Institutions Have Insufficient Settlement Balances ________