Deal of The Day! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Welcome to Pass4Success

- Free Preparation Discussions
Mail Us support@pass4success.com
Location US
Mob_nav_barsMENU

Finra SIE Exam - Topic 2 Question 22 Discussion

Which of the following rates is the interest rate at which banks borrow and lend to each other on an overnight basis?
C) Federal funds rate
A) Prime rate
B) Discount rate
D) LIBOR

Finra SIE Exam - Topic 2 Question 22 Discussion

Actual exam question for Finra's SIE exam
Question #: 22
Topic #: 2
[All SIE Questions]

Which of the following rates is the interest rate at which banks borrow and lend to each other on an overnight basis?

Show Suggested Answer Hide Answer
Suggested Answer: C

Step by Step

Federal Funds Rate: The rate at which depository institutions lend reserves to each other overnight. It is set by the Federal Open Market Committee (FOMC).

Other Rates:

Prime Rate: Rate banks charge their most creditworthy customers.

Discount Rate: Rate the Federal Reserve charges banks for borrowing directly from it.

LIBOR: Interbank lending rate used internationally, now being phased out.

Federal Reserve Explanation of Rates: Federal Funds Rate.


by Trevor at Apr 10, 2026, 01:46 AM

Limited Time Offer

25%

Off

Get Premium SIE Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

0/2000 characters
Submit Cancel
Reyes
5 hours ago
It's definitely the Federal funds rate!
upvoted 0 times
...
Shenika
5 days ago
Prime rate is for loans, not overnight borrowing!
upvoted 0 times
...
Mose
11 days ago
Wait, are we sure about that?
upvoted 0 times
...
Jeff
16 days ago
Yeah, C is the right answer!
upvoted 0 times
...
Ciara
2 months ago
I thought it was LIBOR, but I guess not.
upvoted 0 times
...
Sharika
2 months ago
It's definitely the Federal funds rate!
upvoted 0 times
...
Milly
3 months ago
I practiced a question like this before, and I think the discount rate is different from what they’re asking here. It’s definitely not that one.
upvoted 0 times
...
Tien
3 months ago
The prime rate sounds familiar, but I feel like that's for consumer loans, not interbank lending.
upvoted 0 times
...
Lezlie
3 months ago
I recall that the LIBOR is more about international lending rates, so I don't think that's it. It has to be the Federal funds rate.
upvoted 0 times
...
Jamal
3 months ago
I think the answer might be the Federal funds rate, but I'm not completely sure. I remember it being related to overnight lending.
upvoted 0 times
...

Save Cancel