Which money market security is defined as short-term funds transferred between financial institutions, often for no more than one day

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01-07-2021
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Which money market security is defined as short-term funds transferred between financial institutions, often for no more than one day

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Parrainidn Parrainidn · Answer 1 · 2021-07-09T09:17:18-04:00

Answer: Federal Funds

Explanation:

The Fed requires that some financial institutions keep a certain proportion of their deposits with the Fed called a reserve requirement. Sometimes, on a daily basis, some financial institutions may not be able to meet up with this requirement whilst other exceed it.

When this happens, those with the excess can return lend those who don't have enough. This is called Federal funds and usually lasts for no more than one day.

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