Which of the Following Is NOT Correct with Respect to the Federal

question 47

Multiple Choice

Which of the following is NOT correct with respect to the federal funds market?

• A)It allows depository institutions to accommodate the short-term liquidity needs of other financial institutions.
• B)Federal funds purchased (borrowed)represent an asset to the borrowing bank and a liability to the lending bank .
• C)It is typically most active on Wednesday when banks that are short of required reserves must compensate before the settlement period ends.
• D)All of these are correct.

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