Firms that participate in regular open market transactions with the Federal Reserve are called
A)secondary market banks.
B)Treasury banks.
C)primary dealers.
D)Federal Reserve partners.

Question

Quizplus · Accepted Answer

Firms that participate in regular open market transactions with the Federal Reserve are known as primary dealers. These primary dealers are firms that are authorized to trade securities directly with the Federal Reserve Bank of New York, which is the Federal Reserve's main operational arm. The primary dealers play a critical role in the functioning of the monetary policy, as they are the principal counterparties for the Federal Reserve's open market operations.

Firms That Participate in Regular Open Market Transactions with the Federal