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VARVARA [1.3K]
3 years ago
12

Which of the following statements is correct? A. The Federal funds rate is the rate banks charge their most creditworthy custome

rs. B. The prime rate involves longer, more risky loans than the Federal funds rate. C. The discount rate is the rate banks charge one another on overnight loans. D. The Federal funds rate is derived based on the prime rate.
Business
1 answer:
SIZIF [17.4K]3 years ago
6 0

Answer: Option (B) is correct.

Explanation:

Correct Option: The prime rate involves longer, more risky loans than the Federal funds rate.

It was seen that prime rate is higher than the federal funds rate because it involves more risk, longer term loans than one day or overnight loans occurred between the commercial banks.

Both federal rate and prime rate keep tracking the each others rate.

Remaining all the statements are not correct in the question.

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4 years ago
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Answer:

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4 0
3 years ago
You want to buy an Audi A8 7 years from now. You have priced these cars and found that they currently sell for $83,800. You beli
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Answer:

We to invest <em> $ 17,213 per year to buy the car in  seven years from now</em>

Explanation:

<u><em>First, we solve for the future value of the car:</em></u>

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FV \div \frac{(1+r)^{time} -1}{rate} = C\\

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