Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following is the best reason that changing the rates overnight loans can be achieved by buying and selling government bonds? ernment bonds

Which of the following is the best reason that changing the rates overnight loans can be achieved by buying and selling government bonds?
ernment bonds and overnight loans to banks are both low-risk and low-liquidity, and so a bank will choose whichever one has a better return when looking for thaGovt sort of investment.
Government bonds are always preferred to overnight loans, and so the yield rates of bonds have a great impact on overnight loan rates.
None of the other responses.
Government bonds and overnight loans to banks are both low-risk and high-liquidity, and so a bank will choose whichever one has a better return when looking for that sort of investment.
Overnight loans are always preferred to government bonds, and so the yield rates of bonds have a great impact on overnight loan rates.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Finance

Authors: E Thomas Garman, Raymond Forgue

11th Edition

1111531013, 9781111531010

More Books

Students also viewed these Finance questions