the economics of money, banking, and financial markets

516 #

© 2014 Pearson Canada Inc.#

37. 
    

    If LVTS participating financial institutions have insufficient settlement balances ____.
    A) they can borrow from each other in the pre-settlement trading period at the bank rate
    B) they can borrow from each other in the pre-settlement trading period at the overnight rate
    C) they can borrow from the Bank of Canada
    D) Only B and C of the above.
    Answer: D
    Diff: 3 Type: MC Page Ref: 408
    Skill: Applied
    Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
    Canada

    
    


38. 
    

    If LVTS participating financial institutions have insufficient settlement balances ____.
    A) they can borrow from each other in the pre-settlement trading period
    B) they can borrow from the Bank of Canada
    C) they can borrow from the Bank of Canada at the prime rate
    D) Only A and B of the above.
    Answer: D
    Diff: 3 Type: MC Page Ref: 408
    Skill: Applied
    Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
    Canada

    
    


39. 
    

    LVTS participants with positive settlement balances at the end of the day ____.
    A) are paid the bank rate
    B) are paid the overnight rate
    C) are paid the bank rate less 50 basis points
    D) are paid the prime rate
    Answer: C
    Diff: 3 Type: MC Page Ref: 408
    Skill: Applied
    Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
    Canada

    
    


40. 
    

    The rate spread at the Bank of Canada for LVTS balances is ____.
    A) 300 basis points
    B) 200 basis points
    C) 50 basis points
    D) 25 basis points
    Answer: C
    Diff: 1 Type: MC Page Ref: 408
    Skill: Applied
    Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
    Canada