LIBOR measures

Question

LIBOR measures

Quizplus · Accepted Answer

LIBOR stands for London Interbank Offered Rate, and it is an interest rate benchmark that measures the cost of borrowing funds for banks in the London interbank market. It is widely used for setting the interest rates on various financial instruments, including dollar-denominated loans. Therefore, option C is the most appropriate answer. Option A is incorrect because LIBOR does not measure the duration of fixed-rate assets. Option B is incorrect because while banks use LIBOR to manage interest rate risk, LIBOR itself does not directly measure this risk. Option D is incorrect because LIBOR does not relate to the value of the dollar relative to other currencies.

LIBOR Measures