Suppose that OIS rates for all maturities are 2.5% and swap rates for all maturities are 3%.Which of the following is true?
A) Forward LIBOR rates are greater when OIS discounting is used than when LIBOR discounting is used
B) Forward LIBOR rates are less when OIS discounting is used than when LIBOR discounting is used
C) Forward LIBOR rates are the same for both OIS discounting and LIBOR discounting
D) Either A or B can be true
Correct Answer:
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