The interest rate the Federal Reserve charges for loans to member banks is called the

BANKING GENERAL KNOWLEDGE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	prime rate.
B	discount rate.
C	market rate.
D	treasury rate.

Explanation:

Detailed explanation-1: -The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank’s lending facility-the discount window.

Detailed explanation-2: -The federal discount rate is the interest rate the Federal Reserve (Fed) charges banks to borrow funds from a Federal Reserve bank. The Fed discount rate is set by the Fed’s board of governors, and can be adjusted up or down as a tool of monetary policy.

Detailed explanation-3: -A discount rate is an interest rate. The term “interest rate” is used when referring to a present value of money and its future growth. The term “discount rate” is used when looking at an amount of money to be received in the future and calculating its present value.

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