16-83 Daylight overdraft
A)is a bank's negative intraday balance in its reserve account at the Fed.
B)does not occur under the current payments system.
C)invites a fee is 50 basis points,quoted as an annual rate on the basis of a 24-hour day.
D)has a seasonal component.
E)is not a potential source of instability in the financial markets.

Question

Quizplus · Accepted Answer

A daylight overdraft occurs when a bank's reserve account at the Federal Reserve goes negative during the day, which is a common occurrence in the current payments system.

16-83 Daylight Overdraft