Question

The LIBOR is the:(A) Interest rate commonly charged for loans between banks.(B) Average inflation rate in European countries.(C) Maximum loan rate ceiling on loans in the international money market.(D) Maximum deposit rate ceiling on deposits in the international money market.(E) Maximum interest rate offered on bonds that are issued in London.

Answer 1

A) Interest rate commonly charged for loans between banks.

LIBOR stands for The London Inter-bank Offered Rate which acts like an interest rate which is on aggregate basis computed from assessments proffered by the preeminent banks in London. Each group determines what it would be accredited were it to obtain from other banks. The rate which is obtained is usually abridged to Libor or LIBOR, or more authoritative to ICE LIBOR.