Which of the following statements is true regarding the situation in the federal funds market illustrated in the graph? % Discount Rate IORB Rate FF Rate Supply Reserves Demand Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. There is an arbitrage opportunity and some banks will borrow reserves in the federal funds market and deposit the reserves in their reserve account at the Fed. Your answer C There is an arbitrage opportunity and some banks will borrow reserves from the Fed's discount window and deposit the reserves in their reserve account at the Fed. There is no arbitrage opportunity because the federal funds rate is less than the interest on reserve balances rate. d There is no arbitrage opportunity because the discount rate is higher than the federal funds rate. Show Submitted Answer Show Correct Answer Check My Answer