The interest rate on overnight loans between a bank and other banks is:
A)the cash rate.
B)the LIBOR.
C)the interbank cash rate.
D)the interbank cash rate or simply the cash rate.

Question

Quizplus · Accepted Answer

The overnight interest rate between banks is commonly referred to as the interbank cash rate or the cash rate. Therefore, the best choice is D, which provides both options as the correct answer. The LIBOR (Choice B) is the London Interbank Offered Rate, which is an interest rate used to determine the cost of borrowing for banks and other financial institutions. However, it is not specifically the rate at which banks borrow from each other overnight. The interbank cash rate (Choice C) is also known as the cash rate and is a more specific option than the general term "interbank rate". Therefore, choices A and C are not incorrect, but D is the best answer.

The Interest Rate on Overnight Loans Between a Bank and Other