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    Discount Rate

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    The following question asked that suppose you have $5,000 to invest. At a restaurant, youoverhear someone saying that the Fed is almost certain to increase the discount rate dramatically. If this rumor is correct, do you think that you should invest now or wait until after the increase in the discount rate? Or doesn't it matter? Be sure to explain the reasons for your preference (or lack of it) in this regard.

    © BrainMass Inc. brainmass.com October 9, 2019, 5:35 pm ad1c9bdddf
    https://brainmass.com/economics/banking/federal-reserve-discount-rate-61830

    Solution Preview

    If I had $5000 to invest, I would disregard the rumor because the discount rate is the rate which banks can borrow ...

    Solution Summary

    Discount rate is discussed in the solution.

    $2.19