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Discount Rate
Discount Rate
Image 1 The interest rate local banks pay to the central bank for secured loans. The discount rate is typically set by the central bank, in the US it is set by the FOMC.

Also, the rate used in calculating present value. Also known as capitalization rate.

Image 2 This is very close to the risk free rate.


Discount Window

Fed Funds Rate

FOMC

Present Value