Bank of Canada expects economy to slow down in the future. To prevent inflation from falling, Bank

wants to ease monetary conditions it lowers the operating band from 0.75% - 1.25% to

0.5% - 1%

a) identify the initial bank rate, deposit rate and target overnight interest rate:

b) identify the new bank rate, deposit rate, and the overnight interest rate target:

c) If during the course of the day overnight funds are trading above the target overnight rate,

manager at the trading desk at BoC enters into __________________ (SPRAs or SRAs?)