Which of the following statements is correct? 1. The federal funds rate is derived based on...

Which of the following statements is correct?

1. The federal funds rate is derived based on the prime rate.

2. The discount rate is the rate banks charge one another on overnight loans.

3. The prime rate involves longer, more risky loans than the federal funds rate.

4. The federal funds rate is the rate banks charge their most creditworthy customers.

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Expert Solution

Rahul Sunny answered 2 years ago

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