The interest rate private banks charge each other for lending reserves is called the federal funds rate.

As the federal funds rate changes, other interest rates tend to move in the same direction

Indicate whether the statement is true or false

A major corporation hires high school students on a part-time basis. It offers a reward of $5,000 to any of its high school seniors who graduate college in four years. What is the present value of that reward to a student who just finished her junior year of high school, assuming a nominal rate of interest of 8%?

What will be an ideal response?