Which of the following is correct regarding the discount rate?
A)It is the interest rate that commercial banks charge their most creditworthy customers.
B)It is the interest rate that thrift institutions charge for home mortgages.
C)It is the interest rate at which depository institutions can borrow from the Federal Reserve.
D)It is the interest rate set in the market for U.S.Treasury Bills.
E)It is the prime interest rate.

Question

Quizplus · Accepted Answer

The discount rate is the interest rate at which depository institutions (such as banks) can borrow from the Federal Reserve.

Which of the Following Is Correct Regarding the Discount Rate