Prior to the Credit Crisis That Started in 2007 Which

question 16

Multiple Choice

Prior to the credit crisis that started in 2007 which of the following was used by derivatives traders for the discount rate when derivatives were valued

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

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Definitions:

Negative Terminal

The terminal of an electrical device (such as a battery) through which current flows out, typically regarded as the source of electrons.

Cathode

The negative terminal of an electric device.

Lead-acid Batteries

A type of rechargeable battery that uses lead peroxide and sponge lead, employing a sulfuric acid electrolyte.

Electrolyte

A substance that produces an electrically conducting solution when dissolved in a polar solvent, such as water, facilitating the flow of electric charge.