The yields on ________ play an important role in the world financial markets because they are viewed globally as the cost of bank borrowing since they are effectively the rates at which major international banks offer to pay each other to borrow money by issuing a ________ with given maturities.

Question

Quizplus · Accepted Answer

Eurodollar CDs are time deposits denominated in U.S. dollars at banks outside the United States, and thus are not subject to U.S. banking regulations. The yields on these CDs are significant in the global financial markets as they reflect the cost of bank borrowing internationally. The statement correctly identifies that these yields are associated with the rates at which major international banks are willing to lend to each other through the issuance of Eurodollar certificates of deposit (CDs) with specific maturities.

The Yields on ________ Play an Important Role in the World