2.) True or False: The FOMC wishes to increase the discount rate by 25bps ...
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Finance
2.)
True or False: The FOMC wishes to increase the discount rate by 25bps if the current rate is 2.500%, the new rate will be 2.500% x (1 + 25bps) = 2.500% x (1 + 25%) or 3.125%.
True or False: A single basis point is 1% or .01
True or False: LIBOR is the Italian god of fertility and of wine, commonly identified with the Greek god Dionysus. He had no temple in Rome but an important cult on the Aventine hill with his female counterpart Libera and with Ceres, founded in 493 bc. His festival, the Liberalia, was on 17 March, characterized by a procession with phallus and by crude songs and, according to Virgil in Georgics 2, the use of masks, apparently hung on trees. This festival was a popular time for boys to assume the toga virilis (man's toga). The Romans connected his name with libertas (liberty).
True or False: The fed funds rate is the interest rate charged by banks with excess reserves at a Federal Reserve District Bank to banks needing overnight loans to meet reserve requirements.
True or False: The fed funds rate is the interest rate charged by the Federal Reserve to banks borrowing at the discount window
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