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© 2014 Pearson Canada Inc.#
The lower limit of the operating band for the overnight interest rate is ____.
A) the bank rate
B) the prime rate
C) the rate the Bank of Canada charges LVTS participants with negative settlement balances at
the end of the banking day
D) 50 basis points below the bank rate.
Answer: D
Diff: 1 Type: MC Page Ref: 406
Skill: Recall
Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
Canada
If the operating band for the overnight interest rate is from 3.5 to 4.0 percent, then ____.
A) the bank rate is 4.0 percent
B) the bank rate is the lower limit of the operating band
C) the bank rate is the rate the Bank of Canada charges LVTS participants with negative
settlement balances at the end of the banking day
D) Both A and C of the above.
Answer: D
Diff: 1 Type: MC Page Ref: 406
Skill: Applied
Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
Canada
If the operating band for the overnight interest rate is from 3.5 to 4.0 percent, then ____.
A) the rate on positive settlement balances at the Bank of Canada is 3.5 percent
B) the rate on positive settlement balances at the Bank of Canada is the lower limit of the
operating band
C) the bank rate is the lower limit of the operating band.
D) Both A and B of the above.
Answer: D
Diff: 1 Type: MC Page Ref: 406
Skill: Applied
Objective List: 17.1 Characterize the framework for the implementation of monetary policy in
Canada