Reference rates | Interest rates
The London Inter-Bank Offered Rate is an interest-rate average calculated from estimates submitted by the leading banks in London. Each bank estimates what it would be charged were it to borrow from other banks. The resulting average rate is usually abbreviated to Libor (/ˈlaɪbɔːr/) or LIBOR, or more officially to ICE LIBOR (for Intercontinental Exchange LIBOR). It was formerly known as BBA Libor (for British Bankers' Association Libor or the trademark bba libor) before the responsibility for the administration was transferred to Intercontinental Exchange. It is the primary benchmark, along with the Euribor, for short-term interest rates around the world. Libor was phased out at the end of 2021, and market participants are being encouraged to transition to risk-free interest rates. As of late 2022, parts of it have been discontinued, and the rest is scheduled to end within 2023; the Secured Overnight Financing Rate (SOFR) is its replacement. Libor rates are calculated for five currencies and seven borrowing periods ranging from overnight to one year and are published each business day by Thomson Reuters. Many financial institutions, mortgage lenders, and credit card agencies set their own rates relative to it. At least $350 trillion in derivatives and other financial products are tied to Libor. In June 2012, multiple criminal settlements by Barclays Bank revealed significant fraud and collusion by member banks connected to the rate submissions, leading to the Libor scandal. The British Bankers' Association said on 25 September 2012 that it would transfer oversight of Libor to UK regulators, as proposed by Financial Services Authority managing director Martin Wheatley's independent review recommendations. Wheatley's review recommended that banks submitting rates to Libor must base them on actual inter-bank deposit market transactions and keep records of those transactions, that individual banks' Libor submissions be published after three months, and recommended criminal sanctions specifically for manipulation of benchmark interest rates. Financial institution customers may experience higher and more volatile borrowing and hedging costs after implementation of the recommended reforms. The UK government agreed to accept all of the Wheatley Review's recommendations and press for legislation implementing them. Significant reforms, in line with the Wheatley Review, came into effect in 2013 and a new administrator took over in early 2014. The British government regulates Libor through criminal and regulatory laws passed by Parliament. In particular, the Financial Services Act 2012 brings Libor under UK regulatory oversight and creates a criminal offence for knowingly or deliberately making false or misleading statements relating to benchmark-setting. (Wikipedia).
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
What is the parent function of a linear graph
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
Graphing the system of two linear inequalities with two horizontal line
👉 Learn how to graph a system of inequalities. A system of inequalities is a set of inequalities which are collectively satisfied by a certain range of values for the variables. To graph a system of inequalities, each inequality making up the system is graphed individually with the side of
From playlist Solve a System of Inequalities by Graphing
What are the x and y intercepts of a linear equation
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
What do I need to know to graph an equation in slope intercept form
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
What is everything you need to know to graph an equation in slope intercept form
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
Summary for graph an equation in Standard form
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
Eurodollar futures contract (FRM T3-28)
[my xls is here https://trtl.bz/2O6m5ea] A Eurodollar (ED) futures contract is an interest rate derivative: it references a future three-month LIBOR interest rate. The futures quote is given by Q = 100 - R, where R is LIBOR; for example, a ED futures quote of 97.00 signifies an anticipated
From playlist Financial Markets and Products: Intro to Derivatives (FRM Topic 3, Hull Ch 1-7)
Swaps and The Law of Comparative Advantage - How to do the comparative advantage swap calculation.
In todays video we learn about how Swap participants benefit from the law of comparative advantage. These classes are all based on the book Trading and Pricing Financial Derivatives, available on Amazon at this link. https://amzn.to/2WIoAL0 Check out our website http://www.onfinance.org/
From playlist Swaps
Valuation of plain-vanilla interest rate swap (T3-32)
[here is my XLS https://trtl.bz/2Q4XFCh] I breakdown the valuation of an interest rate swap into three steps: 1. The assumptions, which includes understanding the TIMELINE; e.g., we are valuing the stop at some point after origination and it has some remaining life (in this case 15 months)
From playlist Financial Markets and Products: Intro to Derivatives (FRM Topic 3, Hull Ch 1-7)
FRM: Eurodollar futures: introduction
Here is an introduction to the Eurodollar futures contract using current quotes to illustrate: Assume we take a long position in a December 2008 Eurodollar futures contract. The quote is 97.005. That means we are "locking in" an annualized LIBOR rate of 2.995% (1100 -- 97.005). The quote o
From playlist Derivatives: Interest Rate Derivatives
FRM: Forward rate agreement (FRA)
An FRA is a contract that lets the buyer (who is long the rate) lock-in an interest (borrowing) rate. In this example, the FRA buyer locks in LIBOR at 3%. For more financial risk videos, visit our website! http://www.bionicturtle.com
From playlist Derivatives: Interest Rate Derivatives
Plain vanilla interest rate swap (T3-30)
[here in my xls https://trtl.bz/2QBc5et] The "plain vanilla" interest rate swap is the common interest rate derivative: one counterparty, in this example Apple (who is the "fixed-rate payer") agrees to pay cash flows equal to interest at a predetermined FIXED rate on a notional amount (in
From playlist Financial Markets and Products: Intro to Derivatives (FRM Topic 3, Hull Ch 1-7)
This illustrates how an interest rate swap can transform a floating-rate obligation into a fixed-rate obligation and vice-versa. For more great financial risk management videos, visit the Bionic Turtle website! http://www.bionicturtle.com
From playlist Derivatives: Interest Rate Derivatives
Hedge interest rate exposure with Eurodollar futures contract (FRM T3-29)
[my xls is here https://trtl.bz/2p2X0pJ] If we plan to borrow in the future, our exposure (risk) is to higher rates and the trade is a SHORT position in the Eurodollar (ED) futures contract (because higher LIBOR corresponds to lower Quote). If we plan to lend (aka, invest) in the future, o
From playlist Financial Markets and Products: Intro to Derivatives (FRM Topic 3, Hull Ch 1-7)
FRM: Interest rate swap (IRS) valuation: as two bonds
This video illustrates the valuation of an interest rate swap as two bonds. For more information on interest rate swap (IRS), visit Bionic Turtle at https://www.bionicturtle.com.
From playlist Swaps
👉 Learn about graphing linear equations. A linear equation is an equation whose highest exponent on its variable(s) is 1. i.e. linear equations has no exponents on their variables. The graph of a linear equation is a straight line. To graph a linear equation, we identify two values (x-valu
From playlist ⚡️Graph Linear Equations | Learn About
Intro to Linear Systems: 2 Equations, 2 Unknowns - Dr Chris Tisdell Live Stream
Free ebook http://tinyurl.com/EngMathYT Basic introduction to linear systems. We discuss the case with 2 equations and 2 unknowns. A linear system is a mathematical model of a system based on the use of a linear operator. Linear systems typically exhibit features and properties that ar
From playlist Intro to Linear Systems
In a securitization, we can take a balance-sheet perspective: on the left-hand side, credit-sensitive assets (collateral) have value, create cash flow, and contain risk; on the right, liabilities (tranches issued to investors) IN TOTAL must preserve value, cash flow and risk.
From playlist Credit Risk: Securitization