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LIBOR is known as a benchmark rate to determine the interest rate on loans in money market and credit market. These interest rates are based
LIBOR is known as a benchmark rate to determine the interest rate on loans in money market and credit market. These interest rates are based on LIBOR and the degree of risk involved in lending money. The risk premium calculated based on the risk is dependent on:
risk-free interest rate of the borrower.
borrower's stock price
credit risk of the borrower.
lender's stock price
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