Option 2 Prime rate is higher than federal funds rate
Since Q2 of 1994, the rule of thumb for US Prime rate is the following:
U.S. Prime Rate = (The Fed Funds Target Rate + 3)
Hence prime rate is usually higher than Federal Funds rate set by US Fed rate.
Which of the following statements is true? The prime rate is often the same as the...
12. Which of the statements regarding bonds is true? (a) A bond with a BB rating is regarded as a junk bond. (b) A bond with AAA rating would never default. (c) The minimum coupon rate for a bond is the Federal funds rate. (d) For newly issued bonds, the coupon rate cannot be higher than the prime rate.
Question 39 (1 point) Which of the following statements is true? O A) The Federal Reserve sets the target for the federal funds rate, and then uses the reserve requirement to push banks toward that target. B) The Federal Reserve does not set the federal funds rate, but it influences it through the use of its open-market operations. C) The Federal Reserve sets the federal funds rate. D) The Federal Reserve will set a higher target for the federal funds...
1.) Which interest rate is targeted by the Federal Reserve? Question 11 options: Discount rate Prime rate Federal funds rate Student loan rate 2.) When the federal reserve wishes to increase the interest rate, it sells bonds on the open market buys bonds on the open market increases taxes decreases taxes
Explain the difference between the federal funds rate, the prime rate, the discount rate and the required reserve ratio.
Question 14 Which of the following statements is true of adjustable-rate mortgages? There is no limit as the amount of payment change on an ARM. The interest rate changes on ARMs are limited per year and per lifetime. They cannot be converted to fixed-rate loans. They generally carry higher initial interest rates than conventional mortgages.
Question 2 Which of the following statements is true concerning the rate of a chemical reaction? The initial rate is higher than the final rate The rate of reactant use and product synthesis are equal The rate of reactant usage remains constant The rate of product synthesis increases with time
Which of the following statements applies to the discount rate? O This rate is charged to depositors who are unable to meet their reserve requirement O The fed funds rate is the same as this rate. O The Fed does not directly control this rate. O This rate is used when banks borrow directly from the Fed. Save and Continue
Which of the following statements is true? A) A market imperfection exists if the promised borrowing rate is higher than the expected borrowing rate. B) A market imperfection exists if the promised savings rate is higher than the promised borrowing rate. C) A market imperfection exists if the expected borrowing rate from the lenderʹs perspective differs from the expected borrowing rate from the borrowerʹs perspective. D) All of the above are market imperfect Which of the following statements is true?...
7. Which of the following statements is TRUE? A) SN2 reactions occur with the same rate regardless of the structure of alkyl halide or substrate B) S2 reactions are concerted with no intermediate C) S 2 reactions proceed with the same rate regardless of the nucleophile used D) S2 reactions are best performed in polar protic solvents E) In an S 2 reaction, loss of the leaving group to give a carbocation is the rate-limiting step 8. Consider the following...
31. Banks pay the _____________ rate when they borrow reserves from other banks. Banks pay the ______________ rate when they borrow reserves from the Fed. discount; federal funds federal funds; prime federal funds; discount prime; discount