The __________ Interest Rate Is Based on the Cost of Borrowing

question 22

Multiple Choice

The __________ interest rate is based on the cost of borrowing offshore U.S.dollars in the global interbank market.

• A) International Rate Exchange
• B) Frankfurt International Trade Rate
• C) London Interbank Offered Rate
• D) New York Exchange Rate

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Definitions:

Discount Rate

The interest rate charged by central banks on loans they give to commercial banks.

Present Values

The present equivalent of a future money sum or cash flow series, calculated using a particular rate of return.

Student Loans

Financial borrowings aimed at financing higher education expenses, subject to repayment with interest.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, usually expressed as a percentage of the principal.