When a Bank in Need of Funds for a Few

question 9

Multiple Choice

When a bank in need of funds for a few days sells some of its government securities to a corporation with a temporary excess of funds and then buys them back shortly thereafter, this is a

• A)federal funds loan.
• B)loan through the Federal Reserve's lending facility.
• C)repurchase agreement.
• D)commercial paper transaction.

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Definitions:

Note Settlement

The process of satisfying the obligations of a promissory note, typically involving the repayment of the principal and accrued interest.

Past Due Account

An account that has not been paid by the deadline, resulting in overdue payments.

Accounting Equation

The fundamental formula in accounting that represents the relationship between assets, liabilities, and equity: Assets = Liabilities + Equity.

Voucher System

A set of procedures that uses vouchers for authorizing and recording liabilities and cash payments.