SSC Economics Sample Paper NCERT Sample Paper-6

  • question_answer
    Which one of the following is correct about the LIBOR in the international Capital Market?

    A)  It is the average interest rate estimated by leading banks in London

    B)  It is the mechanism of calculation of the interest subvention given to loans in the international market

    C)  It is the credit given to the oil importers in the world petroleum market

    D)  All the above

    Correct Answer: A

    Solution :

    [a] The LIBOR is the world's most widely used benchmark for short-term interest rates. It is an interest rate at which banks can borrow funds, in marketable size, from other banks in the London interbank market. The LIBOR is fixed on a daily basis by the British Bankers Association. The LIBOR is derived from a filtered average of the world's most creditworthy banks' interbank deposit rates for larger loans with maturities between overnight and one full year.

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