Q428
In Eurodollar market, increase in demand of Euro dollars results in
A.
increase in LIBOR
AnswerB.
decrease in LIBOR
C.
increase in KIBOR
D.
decrease in KIBOR
Answer: Option A
Solution
Answer: Option A
Solution:
In Eurodollar market, increase in demand of Euro dollars results in increase in LIBOR. Deposits from overnight out to a week are priced based on the fed funds rate. Prices for longer maturities are based on the corresponding London Interbank Offered Rate (LIBOR).