What Is the Overnight Rate

question 58

Multiple Choice

What is the overnight rate?

• A) the lowest rate of interest at which money may be borrowed commercially
• B) the interest rate charged when major financial institutions borrow from each other
• C) the interest rate at which banks lend reserve balances to other banks
• D) the interest rate offered by commercial banks to its most creditworthy customers

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Definitions:

Premium

The amount paid for an insurance policy or the extra cost above the normal price of a product or service, often associated with higher quality or benefits.

Insurance Companies

Businesses that protect their clients against financial losses from certain specified risks (death, accident, and theft, for example).