What does the term 'discount rate' refer to?

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The upfront deduction of interest when buying, selling, or lending a commercial paperThe interest rate set by the central bank for loans extended to its member banksBoth of the above definitionsNeither of the above

Explanation

Option A refers to the interest deducted in advance during transactions involving commercial papers. Option B indicates the central bank’s rate charged to member banks on loans. Therefore, the discount rate can mean both of these, making option C correct.