The Wall Street Journal has a daily listing of what are call

The Wall Street Journal has a daily listing of what are called \"Money Rates” or interest rates on short-term securities. Locate it either in a recent issue of the newspaper by looking at the index on page 1 of the Money and Investing section, or in the Market Data Center of www.wsj.com. The most important money rates are the prime rate, the federal funds rate, and the Treasury bill rate. Describe each of these and report the current rate quoted in the paper.

Solution

Federal fund rate is that interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution overnight.

Prime rate is the rate of interest that is being charged by commercial banks on funds to its least-risky customers.

Treasury Bills (or T-Bills) mature in one year or less, and are often cited as the investment option with the least amount of risk available to investors. Treasury bill rate is the interest being charged on such instruments.

The current market rates, extracted from www.wsj.com, are as follows: