All of the following statements about secondary credit are true EXCEPT
A) they are temporary, short-term loans to satisfy seasonal requirements.
B) the secondary credit interest rate is set above the primary credit rate.
C) it is intended for banks not eligible for primary credit.
D) borrowers of secondary credit are less financially healthy.

Question

Quizplus · Accepted Answer

Secondary credit is not just for seasonal requirements, but also for unexpected needs or emergencies, and the loans can be longer-term. The other statements are true: the secondary credit rate is higher than the primary credit rate, it is intended for banks not eligible for primary credit, and borrowers of secondary credit may be perceived as less financially healthy.

All of the Following Statements About Secondary Credit Are True