In the Eurodollar market, the increase in demand of Euro dollars result in ____________?
Correct answer: A. increase in LIBOR
- A. increase in LIBOR
- B. decrease in LIBOR
- C. increase in KIBOR
- D. decrease in KIBOR
Explanation
Eurodollar demand and LIBOR are positively related because LIBOR reflects the rate at which major banks lend these deposits. When demand for Eurodollars rises, their borrowing rate, LIBOR, rises as well.
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