Asked by Yakelin Zamora on Jun 19, 2024
Verified
The LIBOR is the:
A) Rate most international banks charge one another for overnight Eurodollar loans.
B) Long-term relationship between changes in inflation rates and changes in exchange rates.
C) Market in which one country's currency is exchanged for another country's currency.
D) Implicit exchange rate between two currencies quoted in a third currency.
E) Agreement to exchange two currencies at a particular point in time.
LIBOR
London Interbank Offered Rate, a benchmark interest rate at which major global banks lend to one another.
Eurodollar Loans
Loans in U.S. dollars that are deposited in banks outside the United States, often used in international trade financing.
Overnight
Referring to transactions that occur or are settled from the end of one business day to the start of the next.
- Outline the workings of the currency exchange market and its impact on global trade activities.
Verified Answer
MF
Maria FloresJun 19, 2024
Final Answer :
A
Explanation :
The LIBOR (London Interbank Offered Rate) is the interest rate at which banks offer to lend funds to one another in the international interbank market for short-term loans, particularly for overnight Eurodollar loans.
Learning Objectives
- Outline the workings of the currency exchange market and its impact on global trade activities.
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