Libor is :
-the acronym for London Interbank Offer Rate.
-a benchmark interest rate that indicates the cost of borrowing
for leading banks to borrow from one another.
LIBOR is based on ?
-the average interest rate calculated
from estimates submitted by the member banks every day
-5 currencies which include the U.S. dollar, the euro,
the British pound, the Japanese yen, and the Swiss franc.
it provided seven maturities that included
overnight, 1 week, 1 month, 2 months, 3 months, 6 months & 12 months.
it will have a total of 35 different
LIBOR rates calculated and published on every business day.
LIBOR is frequently used by various financial instruments
in both financial markets and commercial fields around the world.
such as interest rate futures, interest rate swaps,
collateralized debt obligations, credit cards,
mortgages, corporate loans, government bonds,
and also student loans
The example that mentioned is for what ?
It is used the LIBOR as the benchmark reference
to determine the interest rate charges
the LIBOR not only affected the financial institutions