The choices that accurately describe the overnight reverse repo rate are:
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It uses bonds as collateral in case of default. - This is true, as the overnight reverse repo program involves the Fed selling securities to counterparties with an agreement to repurchase them later, using those securities as collateral.
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It is administered separately from the interest rate on reserve balances. - This is also accurate. The overnight reverse repo rate and the interest rate on reserve balances can be set independently by the Federal Reserve.
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It lets the Fed provide nonbanks with an option besides money market investments. - This statement is correct as well. The program allows nonbank financial institutions to park their cash in a safe investment with the Fed rather than using traditional money market instruments.
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It allows the Fed to remove the floor holding up money market interest rates. - This statement is misleading. The overnight reverse repo rate is actually used to establish a floor for short-term interest rates, by providing a more secure option for investment that influences the money market rates.
Therefore, the first three choices are accurate descriptions of the overnight reverse repo rate.