Which of the Following Is True of the Discount Rate

question 20

Multiple Choice

Which of the following is true of the discount rate?

• A)It is the interest rate commercial banks charge their most creditworthy customers.
• B)It is the interest rate that thrift institutions charge for home mortgages.
• C)It is the interest rate at which depository institutions can borrow from the Federal Reserve.
• D)It is the interest rate set in the market for U.S.Treasury Bills.
• E)It is the prime interest rate.

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Definitions:

Intangible Assets

Non-physical assets owned by a business that have value, such as patents, trademarks, goodwill, and copyrights.

Normal Balance

The side (debit or credit) on which an account increases, determined by the account type in the accounting equation.

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, typically including a balance sheet and income statement.

Permanent/Temporary

Denotes the duration of financial accounts or business strategies: "permanent" indicates long-term endurance, while "temporary" suggests a short-term or temporary existence.