Question

Put the items in the correct order from lowest interest rate to highest. Below is a sequence of events. Place them in the order they should occur, number 1 being the first item. Select the step number from the drop down next to each item. Items to order: 1. Prime Rate 2. Federal Funds Rate 3. Interest rate on John Sample's car loan Prime Rate 1 Federal Funds Rate 1 Interest rate on John Sample's car loan

Answer 1

Federal Fund Rate

Prime rate

Interest rate on John Sample's car loan

Step-by-step explanation:

Federal fund rate is target interest rate that is set by Federal Open Market Committee. This rate is used by commercial banks to borrow and lend their excess reserves. Prime rate is usually 3% higher than the federal fund rate.Prime rate is the interest rate that banks charge to each other for lending fund. This is interbank interest rate therefore it is lower than the Interest rate on Car loan.