Federal funds rates usually parallel the:
A)prime rate
B)U.S.Treasury bill rate
C)Dow Jones Industrial Average
D)none of the above

Question

Quizplus · Accepted Answer

Federal funds rates typically track closely with the U.S. Treasury bill rate, since the latter is seen as a risk-free benchmark for short-term interest rates in the U.S. economy. The prime rate and the Dow Jones Industrial Average are not closely tied to federal funds rates, although changes in the federal funds rate can have indirect effects on both of these indicators.

Federal Funds Rates Usually Parallel The