Multiple Choice
Which of the following statements is true about federal funds?
A) Federal funds offer loans at a coupon rate that is two times the market interest rate.
B) Federal funds have very long maturities, often three years or more.
C) Federal funds offer loans to the state government to meet the reserve requirements of the federal government.
D) Federal funds are used to repay the T-bills issued by the federal government.
E) Federal funds are used by banks to meet the reserve requirements of the Federal Reserve.
Correct Answer:
Verified
Correct Answer:
Verified
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