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LOS j: Define LIBOR and explain its importance to funded investors who borrow short term.
Q1. A funded investor has a short-term investment returning a 7% return. The borrowing costs are 20 basis points above the reference rate. If the T-bill rate is 3% and the LIBOR rate is 3.5%, what is the investor’s current profit on this investment?
A) 3.8%.
B) 3.3%.
C) 1.5%.
Q2. The most important LIBOR rate for funded investors is the:
A) 20 year rate.
B) 1 year or less rate.
C) 10 year rate.
Q3. The interest rate paid on negotiable CDs by banks in London is referred to as:
A) the Fed Funds rate.
B) LIBOR.
C) the London rate.
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发表于 2009-3-2 17:25
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