This week’s study question from the Solomon Online Exam Simulator question database is now available.
Question (Relevant to the Series 6, Series 7, Series 52, and Series 65):
The Fed (Federal) Funds rate refers to:
Answers:
A. The rate banks have to pay when borrowing from the Federal Reserve
B. The rate broker-dealers pay when borrowing on behalf of customers
C. The rate that the most credit worthy customers pay when borrowing
D. The rate banks charge each other for overnight loans over $1,000,000
Correct Answer: D. The rate banks charge each other for overnight loans over $1,000,000
Rationale: The Federal Funds Rate refers to the rate that banks charge each other for short-term loans.
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