What’s the difference between fed funds & libor rates,?
also when a client (AAA Corporation) takes out a loan what does the bank offer: fedfunds rates + spread; libor rates + spread; T bill rates + spread and last what’s prime rate composed of. In short at what price rates do banks get their fund and from where, what rates (names of rates) do they charge other banks and clients.
- Anonymous1 decade agoFavorite Answer
The federal funds rate is the interest rate at which private depository institutions lend balances (federal funds) at the Federal Reserve to other depository institutions overnight.
London Inter-Bank Offer Rate. The interest rate that the banks charge each other for loans (usually in Eurodollars). This rate is applicable to the short-term international interbank market, and applies to very large loans borrowed for anywhere from one day to five years.
The lowest rate of interest on bank loans at a given time and place, offered to preferred borrowers. Also called prime interest rate.
- 7 years ago
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