Which of the Following Is the Lowest Rate Charged by Banks

question 71

Multiple Choice

Which of the following is the lowest rate charged by banks for short-term loans?

• A) prime
• B) discount
• C) customary
• D) nominal

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Definitions:

Hedger

An individual or entity that enters into a financial contract to mitigate the risk of adverse price movements in an asset.

Swap Contract

A financial agreement where two parties exchange liabilities or cash flows from two different financial instruments for a set period.

Forward Contracts

Customized contracts between two parties to buy or sell an asset at a specified price on a future date.

Stock Brokers

Professionals or firms that execute buy and sell orders for stocks and other securities on behalf of their clients, in exchange for a fee or commission.