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Creditors will use which of the following to determine the interest rate that they will use...

Creditors will use which of the following to determine the interest rate that they will use for short-term lending?

ninety day t-bill

average rate of savings accounts

money market rates

US treasury bills

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Answer #1

Money market rates are the interest rates that is currently prevailing in the markets.

Money market rates are current based on current situation of market.

Generallt T-bill, Saving account average rate & US treasury bills have fixed rate. Money market rate is perfect for finding current interest rates going on.

Therefore creditor will use money market rates to determine the interest rate that they will use for short-term lending.

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