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Which of the following is TRUE about interest rates? A LIBOR rate is the only risk-free rate proxy that is used extensively by derivatives traders
Which of the following is TRUE about interest rates?
A LIBOR rate is the only risk-free rate proxy that is used extensively by derivatives traders after the credit crisis that started in 2007.
Par yield is the coupon rate that causes the bond price to equal to is market value.
Bond yield is the single discount rate that gives the value of the bond equal to its par (or principal) value.
Treasury rate is considered to be artificially low and as a result Treasury rates are not used by derivatives dealers as a proxy for the risk-free rate.
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