A Banks That Has Excess Reserves Can Earn Additional Income

question 13

Multiple Choice

A banks that has excess reserves can earn additional income by lending the money overnight

• A)To the Fed at the prime rate minus 1 percent.
• B)To other banks at the prime rate minus 1 percent.
• C)To the Fed in the federal funds market.
• D)To other banks in the federal funds market.

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Definitions:

General Partner

A type of partner in a partnership who is responsible for the day-to-day management of the partnership and is personally liable for the partnership's debts.

Misapplication Funds

Refers to the wrongful use or allocation of funds that were intended for a specific purpose.

Partnership Relationship

The legal and operational relationship existing between partners in a business venture, governed by a partnership agreement.

Obligations

Duties or responsibilities imposed by law, contract, or social norms.