What Is LIBOR?
A reference rate is a benchmark that contracts point to; LIBOR was one such rate.
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1.What is a reference rate?
A reference rate is a benchmark that contracts point to; LIBOR was one such rate.
2.How was LIBOR produced?
Banks reported what they thought they would pay to borrow, and the results were turned into one published rate (CFTC).
3.Marge's 10,000 loan costs reference plus 2 points. What does she pay at a reference of 3 percent?
3 plus 2 is 5 percent of 10,000, which is 500; at a reference of 4 percent she pays 600 (worked example).
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