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Federal funds are loans borrowed and lent on

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International Finance and Treasury
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Federal funds are loans borrowed and lent on

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Correct Answer: Option A
Federal funds are loans borrowed and lent on single payment basis. 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.
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