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Mnenie [13.5K]
3 years ago
8

LIBOR is A. a resource used in production. B. an interest rate paid on Eurodollar loans in the London market. C. an interest rat

e paid by European firms when they borrow Eurodollar deposits from U.S. banks. D. the interest rate paid by the British government on its long-term bonds.
Business
1 answer:
zubka84 [21]3 years ago
3 0

Answer:

B. an interest rate paid on Eurodollar loans in the London market.

Explanation:

London InterBank Offered Rate (LIBOR)

This is simillar to the federal funds rate.

It is a rate at which banks offer fonds to other banks, thus "interbank", for short-term loans.

It is generallyaccepted to evaluate and compare interest rate and indicate the borrowing cost between banks.

<u> It is based on five currencies:</u>

  • the US dollar
  • the euro
  • the British pound
  • the Japanese yen
  • and the Swiss franc

<u>Also, there are LIBOR for different maturities:</u>

  • overnight,
  • one week,
  • one month,
  • two months,
  • three months,
  • six months
  • and a year.
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