Of the following,the most sensitive interest rate in the money market is the:
A)bankers' acceptance rate
B)prime rate
C)Federal Reserve's discount rate
D)federal funds rate

Question

Quizplus · Accepted Answer

The federal funds rate is the interest rate at which depository institutions lend funds held at the Federal Reserve to other depository institutions overnight. It is closely watched by market participants as it influences other shorter-term rates and is a key tool used by the Federal Reserve to implement monetary policy. Changes in the federal funds rate affect the cost of borrowing and lending throughout the economy, making it the most sensitive interest rate in the money market.

Of the Following,the Most Sensitive Interest Rate in the Money