Loans & rates

Question 1

From highest to lowest rates:
1) ____ highest
2)
3)
4) ___ lowest

Answer 1

1) prime rate
2) broker loan rate
3) discount rate
4) -fed funds rate

Question 2

Bankers acceptances may be sold ___.

Answer 2

Without a prospectus.

Question 3

___ to pledge something as security for a loan w/out actual delivery of ___.

Answer 3

Hypothecate/hypothecation; the pledged item.

Question 4

Commercial paper 1) matures on a pre-set date & at a pre-set __ 2) is quoted on ___ 3) is an __.

Answer 4

1) price
2) a yield basis
3) unsecured promissory note

Question 5

In a ___ between 2 gov securities dealers, one dealer sells securities to another dealer for cash now w/agreement to pay back w/interest to other dealer. The interest charged is the ___ which fluctuates with/parallels the Fed Funds rate.

Answer 5

Repurchase agreement; “reporate”

Question 6

A ___ is a certificate of deposit that changes the rate of interest based on the prevailing ___ interest rate.

Answer 6

Step-up/step-down; market