Q441
The transactions that came into being when borrowing and lending of excess money occurs are considered as
A.
annual funds transaction
B.
liable funds transactions
C.
federal funds transaction
AnswerD.
functional funds transaction
Answer: Option C
Solution
Answer: Option C
Solution:
The transactions that came into being when borrowing and lending of excess money occurs are considered as federal funds transaction. Federal funds, often referred to as fed funds, are excess reserves that commercial banks and other financial institutions deposit at regional Federal Reserve banks; these funds can be lent, then, to other market participants with insufficient cash on hand to meet their lending and reserve needs.