The Most Common Type of Discount Lending That the Fed

question 116

Multiple Choice

The most common type of discount lending that the Fed extends to banks is called

• A)seasonal credit.
• B)secondary credit.
• C)primary credit.
• D)installment credit.

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Definitions:

Capital Assets

Long-term assets acquired for use in business operations, expected to be used or held for more than one financial period.

Capitalized

Costs that are recognized as part of an asset on the balance sheet rather than being expensed, often related to the acquisition or construction of a long-term asset.

Amortized

The process of gradually writing off the initial cost of an asset or loan over a period of time in a systematic and rational manner.

Deferred Contribution

Contributions or payments made to a fund or organization that are to be recognized as revenue over a future period.