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If Overnight Funds in the Overnight Loans Market Are Trading

Question 29

Multiple Choice

If overnight funds in the overnight loans market are trading above the overnight rate target,then the Bank of Canada will _______ Government of Canada bonds,driving the overnight market rate ______;conversely,if overnight funds are trading below the overnight target rate,then the Bank will _______ Government of Canada bonds,driving the overnight interest rate _______.


A) sell;up;buy;down
B) buy;down;sell;up
C) sell;down;buy;down
D) buy;up;buy;down
E) buy;up;sell;up

Correct Answer:

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