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AAFM GLO_CWM_LVL_1 Exam - Topic 8 Question 58 Discussion

Which of the following is true of Reverse Repo rate?
B) Lower than repo rate
A) Determined by free market forces
C) benchmark for long term rates
D) Part of funding cost for commercial banks

AAFM GLO_CWM_LVL_1 Exam - Topic 8 Question 58 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 58
Topic #: 8
[All GLO_CWM_LVL_1 Questions]

Which of the following is true of Reverse Repo rate?

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Suggested Answer: B

by Felix at Mar 02, 2023, 11:08 PM

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Alease
10 months ago
C is not right, it’s more about short-term rates, not long-term.
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Avery
10 months ago
Really? I’m surprised that’s the case with reverse repo.
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Gail
11 months ago
D makes sense, it's part of how banks manage liquidity.
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Yolande
11 months ago
I thought it was determined by market forces?
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Kiera
11 months ago
B is definitely true, reverse repo is always lower than the repo rate.
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Mona
11 months ago
I feel like the reverse repo rate might not be a benchmark for long-term rates, but I need to double-check that detail.
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Levi
11 months ago
I practiced a similar question where the reverse repo was described as part of the funding cost for banks. That seems relevant here.
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Alpha
11 months ago
I think the reverse repo rate is influenced by market forces, but I can't recall if it's directly determined by them.
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Brianne
11 months ago
I remember studying that the reverse repo rate is usually lower than the repo rate, but I'm not completely sure why that is.
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Laurel
11 months ago
This seems straightforward enough. I'd just create the two WildFire rules, make sure the Accounting one is numbered higher, and then use the Objects tab to add Accounting and Sales to each rule they need to apply to. Shouldn't be too tricky.
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Rebbecca
11 months ago
Okay, let me think this through step-by-step. The question is asking for the "marge code" needed to pass the CaseNumber node from the DRReadCase DataRaptor Extract Action to the HTTP Action's HTTP URL. Based on the answer options, it seems like the correct syntax would be %DRReadCase: CaseNumber%, which corresponds to option A.
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Jolanda
1 year ago
Aha! The reverse repo rate is the benchmark for long-term rates. That means it's the foundation upon which other interest rates are built. It's like the financial version of the chicken and the egg - which came first, the repo or the reverse repo?
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Jerry
1 year ago
That's right, it's like the backbone of the financial system.
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Marti
1 year ago
It's interesting how it plays a crucial role in determining other interest rates.
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Ettie
1 year ago
Yes, the reverse repo rate is indeed the benchmark for long-term rates.
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Socorro
1 year ago
Okay, let's see... The reverse repo rate is lower than the repo rate, right? So it must be the rate the central bank pays to borrow money from the banks. That's a bit like a bank paying you to borrow your money - I'm starting to get dizzy just thinking about it!
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Lai
1 year ago
It's like a role reversal, with the central bank paying interest to the banks instead of the other way around.
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Ronny
1 year ago
That's right! It's the rate at which the central bank borrows money from commercial banks.
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Sue
1 year ago
Yes, you're correct! The reverse repo rate is indeed lower than the repo rate.
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Sharen
1 year ago
Hmm, let me think... Is it the rate banks pay to borrow from the central bank? Or is it the rate they get when they lend to the central bank? I feel like I'm about to get caught in a financial loop.
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Audra
1 year ago
It's the rate banks get when they lend to the central bank.
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Cassie
1 year ago
D) Part of funding cost for commercial banks
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Mary
1 year ago
B) Lower than repo rate
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Felicitas
1 year ago
A) Determined by free market forces
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Patria
1 year ago
D) Part of funding cost for commercial banks
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Lizbeth
1 year ago
C) benchmark for long term rates
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Royal
1 year ago
B) Lower than repo rate
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Merri
1 year ago
A) Determined by free market forces
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Maryln
1 year ago
Reverse Repo rate, huh? I bet it's just the repo rate in reverse - like a secret handshake between the banks and the central bank. The real question is, can I use it to reverse my financial troubles?
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Maryann
1 year ago
Yeah, it's like a way for banks to earn interest on their surplus cash.
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Sherill
1 year ago
I think it's more like a tool for banks to park their excess funds with the central bank.
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Dortha
1 year ago
D) Part of funding cost for commercial banks
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Larae
1 year ago
C) benchmark for long term rates
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Remona
1 year ago
B) Lower than repo rate
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Stevie
1 year ago
A) Determined by free market forces
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Quentin
1 year ago
Hmm, that makes sense too. I guess it could be D then.
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Jeffrey
1 year ago
I disagree, I believe the answer is D) Part of funding cost for commercial banks.
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Quentin
1 year ago
I think the answer is B) Lower than repo rate.
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