Since the credit crisis that started in 2007 which of the following have derivatives traders used as the risk-free rate
A) The Treasury rate
B) The LIBOR rate
C) The repo rate
D) The overnight indexed swap rate

Question

Quizplus · Accepted Answer

Since the credit crisis, derivatives traders have used the overnight indexed swap rate (OIS) as the risk-free rate. This is because the LIBOR rate, once considered the risk-free rate, was found to be manipulated by banks during the crisis. The repo rate is used as a short-term borrowing rate, and the Treasury rate is used as a benchmark for the government debt market, but neither is commonly used as a risk-free rate for derivatives trading.

Since the Credit Crisis That Started in 2007 Which of the Following