Since the Credit Crisis That Started in 2007 Which of the Following

question 11

Multiple Choice

Since the credit crisis that started in 2007 which of the following have derivatives traders used as the risk-free rate

• A) The Treasury rate
• B) The LIBOR rate
• C) The repo rate
• D) The overnight indexed swap rate

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Definitions:

Compensating Balances

A requirement by some banks for companies to maintain a minimum balance in their account as part of a loan agreement, effectively reducing the amount of usable cash.

Management Policy

Guidelines and rules set by an organization's management to direct operations and decision-making in alignment with the company's objectives.

Credit Policy

A credit policy is a set of guidelines that a company follows to determine credit limits, payment terms, and how to manage delinquent accounts for its customers.

Terms of Sale

The conditions under which a sale is made primarily with respect to payment. Terms include a date on which payment is due and often specify a prompt payment discount that may be taken if payment is made within a specified time.