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Choose the correct statement. Treasury bill is riskfree, hence it is the best indicator for riskfree rate. LIBOR is the interest rate that banks borrow
Choose the correct statement.
Treasury bill is riskfree, hence it is the best indicator for riskfree rate.
LIBOR is the interest rate that banks borrow at and it is not riskfree, hence it is not a good indicator for riskfree rate to price derivatives.
There is a lot of risk associated with repo rates.
None of the above is correct.
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