Q420
In Eurodollar market, decrease in demand of Euro dollars results in
A.
increase in KIBOR
B.
decrease in KIBOR
C.
decrease in federal funds rate
AnswerD.
increase in federal funds rate
Answer: Option C
Solution
Answer: Option C
Solution:
In Eurodollar market, decrease in demand of Euro dollars results in decrease in federal funds rate. The federal funds rate refers to the interest rate that banks charge other banks for lending them money from their reserve balances on an overnight basis.