The rate of interest on short-term loans among financial institutions is ________.
A) bankers' acceptances
B) brokers' calls
C) federal funds rate
D) LIBOR

Question

Quizplus · Accepted Answer

The federal funds rate is the rate at which financial institutions lend to each other overnight to meet their reserve requirements with the Federal Reserve. This is a key benchmark for short-term lending rates among financial institutions. Bankers' acceptances, brokers' calls, and LIBOR are all other forms of short-term borrowing or lending, but they are not specifically tied to interbank lending rates.

The Rate of Interest on Short-Term Loans Among Financial Institutions