Define interest rate risk-federal funds market

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Reference no: EM13173401

1. Banks are exposed to interest rate risk primarily because:

(a) Interest rates are very difficult to forecast.

(b) Borrowers from banks are prone to default.

(d) The maturities of bank's assets and liabilities differ.

2. The Federal funds market involves:

(a) The tax revenues of the Federal government.

(b) Loans by the Federal Reserve to banks.

(d) A market for loans made between banks.

Reference no: EM13173401

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