Eurocredits Feature Rollover Pricing

question 4

Multiple Choice

Eurocredits feature rollover pricing.

• A)Rollover pricing was created on Eurocredits so that Eurobanks do not end up paying more on Eurocurrency time deposits than they earn from the loans.
• B)Because of the rollover pricing feature, a Eurocredit may be viewed as a series of shorter-term loans, where at the end of each time period (generally three or six months), the loan is rolled over and the base lending rate is repriced to current LIBOR over the next time interval of the loan.
• C)The lending rate on these Eurocredits is stated as LIBOR + X percent, where X is the lending margin charged depending upon the creditworthiness of the borrower. LIBOR is reset according to a set schedule.
• D)All of the above are true

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