18-105 Which of the Following Observations Concerning the Federal Funds

question 108

Multiple Choice

18-105 Which of the following observations concerning the federal funds rate is NOT true?

• A)The cost of fed funds for the purchasing institution is the federal funds rate.
• B)The federal funds rate is set by DIs that trade in the fed funds market.
• C)The federal funds rate can vary considerably within the day.
• D)The federal funds rate can vary considerably across days.
• E)Rate variability has increased since the introduction of lagged reserve accounting.

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