When building a debt schedule, what are interest rates typically based on for floating-rate debt instruments?
A)Federal funds rate
B)3 year treasury yields
C)Required rate of return
D)LIBOR

Question

Quizplus · Accepted Answer

For floating-rate debt instruments, the interest rates are typically based on LIBOR (the London Interbank Offered Rate), which is the benchmark interest rate at which banks can borrow from each other in the interbank market. The interest rate on floating-rate debt instruments is often set as LIBOR plus a certain spread or margin.

When Building a Debt Schedule, What Are Interest Rates Typically