Question

What is the ranking of the following from lowest to highest:

1. discount rate,
2. prime rate,
3. fed funds,
4. broker's call rate

Answer 1

The ranking from lowest to highest is: discount rate, broker's call rate cannot be determined, fed funds, prime rate.

Step-by-step explanation:

The ranking of the following from lowest to highest is:

1. Discount rate: The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility. It is set above short-term market interest rates.
2. Broker's call rate: This rate is not mentioned in the provided information, so we cannot determine its ranking.
3. Fed funds: This refers to the federal funds rate, which is the interest rate at which depository institutions lend funds to each other overnight. It affects other interest rates.
4. Prime rate: The rate that banks charge their best customers. It is usually three percentage points above the federal funds rate.