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Which rate forms the lower bound (floor) of the LAF corridor?
AThe repo rate
BThe MSF rate
CThe bank rate
DReverse repo rate
Answer & Solution
Correct answer: D. Reverse repo rate
1. The question asks: Which rate forms the lower bound (floor) of the LAF corridor.
2. Correct answer: Reverse repo rate.
3. The reverse repo rate is the floor of the LAF corridor.
_Source: BOI Quick Revision — General Banking & Financial Awareness (2020), LAF corridor_