Answered

Welcome to Westonci.ca, where you can find answers to all your questions from a community of experienced professionals. Explore our Q&A platform to find reliable answers from a wide range of experts in different fields. Our platform provides a seamless experience for finding reliable answers from a network of experienced professionals.

Bank Of The North (B of N) gave out large loans to many of their customers. After reviewing the bank’s records, B of N sees that the bank is now below the Federal Reserve’s minimum reserve requirement. A member bank, Helper Bank, has excess reserves. B Of N borrows enough money from Helper Bank to reach their reserve requirement. The rate of interest that B of N will pay to Helper Bank for the loan is the ________ rate.a. intrabank b. institutional c. federal funds

Sagot :

Tundexi

Answer:

c. federal funds

Explanation:

As this case is concerned, Bank Of The North pay the interest to Helper Bank for the loan as per the Federal Fund rate.

Federal fund rate is the rate of interest on which one bank gives short term or overnight loan to other banks. The interest rate at which federal funds are being borrowed and lent is known as the federal fund rate. This rate is set based on the principle of demand and supply. For instance, if the demand is higher than the supply, this rate will go up.

We hope you found what you were looking for. Feel free to revisit us for more answers and updated information. Thank you for your visit. We're committed to providing you with the best information available. Return anytime for more. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.