ECONOMICS
MONEY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Federal fund rate
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discount rate
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prime rate
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interest rate
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Detailed explanation-1: -The effective Federal Funds Rate (FFR) is the average interest rate that banks pay for overnight borrowing in the federal funds market. The Federal Reserve uses certain tools to adjust this rate, because it influences other interest rates, such as those you pay on credit cards, mortgages, and bank loans.
Detailed explanation-2: -Basic Info. Overnight Federal Funds Rate is at 4.57%, compared to 4.57% the previous market day and 0.08% last year. This is lower than the long term average of 4.60%.
Detailed explanation-3: -The federal funds rate describes the interest rate that banks charge other banks for lending them cash (typically excess monies on hand in their reserve balances) on an overnight basis.
Detailed explanation-4: -The federal funds rate is the interest rate that financial institutions charge each other for loans in the overnight market for reserves.
Detailed explanation-5: -The overnight rate is the rate at which major financial institutions borrow and lend one-day (overnight) funds to and from each other; the Bank sets a target level for that rate. This target for the overnight rate is often referred to as the Bank’s policy interest rate.