The London Interbank Offered Rate (LIBOR):
A) does not compete with the prime rate domestically for international firms.
B) often is lower than the domestic prime rate.
C) is the loan rate offered by London banks to its best customers.
D) is a stable international rate.

Question

Quizplus · Accepted Answer

LIBOR is often lower than the domestic prime rate. It is an internationally recognized benchmark rate that is used as a reference rate for various financial contracts and instruments. It represents the average interest rate at which international banks can borrow from each other. As a result, it is generally lower than the domestic prime rate, which is specific to a particular country or region.