Interest rates for bank loans are frequently linked to either the London Interbank Offered Rate (LIBOR) or the Treasury bill rate.

Question

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Interest rates for bank loans are often tied to either LIBOR or the Treasury bill rate. LIBOR is the interest rate at which banks can borrow funds from other banks in the London interbank market, while the Treasury bill rate is the interest rate at which the US government can borrow money by issuing short-term debt.

Interest Rates for Bank Loans Are Frequently Linked to Either