The transaction of federal funds usually take place in the form of ___________?
Correct answer: C. unsecured loans
- A. functional loans
- B. annual loans
- C. unsecured loans
- D. secured loans
Explanation
Federal funds transactions are generally unsecured loans between financial institutions, relying on the creditworthiness of the borrowing institution rather than pledged collateral. Secured loans require specific assets as security.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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