Exam 21: The Markets for Bank Obligations

CDs issued with a maturity greater than one year are called ________.

To calculate the rate to be charged the customer for issuing a bankers acceptance, the bank determines the rate for which it can sell its bankers acceptance in the open market. To this rate it adds ________.

A negotiable CD allows the initial depositor (or any subsequent owner of the CD) to sell the CD in the open market prior to the maturity date.

Yankee banks rely primarily on deposits for funding and make less use of the money markets to obtain funds.

Banks in the United States can be classified into four groups. Name three of these four groups.

A depository institution that keeps federal funds in excess of the amount required incurs ________, which is the loss of interest income that could be earned on the excess reserves.

Borrowing in the federal funds market is an alternative to borrowing in the repo market.

The effective fed funds rate is the rate least often cited for the fed funds market.