OIS has replaced LIBOR for collateralized derivatives transactions, thus the answer is:-
4) OIS has replaced LIBOR as the discount rate for swaps
Since the 2008 credit crisis 1) LIBOR has replaced OIS as the discount rate for non-collateralized...
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Why LIBOR is replaced? What's the connection between 2008 Credit Crunch, Barclays's scandal and LIBOR replacement? Why LIBOR has biggest effects in banking industry?
1. Is LIBOR replacement has the biggest impact on banks ? 2. Can you discuss the impact of libor replacement from the financial crisis of 2007-2008 and barclays scandal?
Should Financial Institutions Engage in Interest Rate Swaps for Speculative Purposes? Credit default swaps were once viewed as a great innovation for making mortgage markets more stable. Yet, the swaps were sometimes criticized for making the credit crisis worse. Why? Miami Mutual Bank* purchases a two-year interest rate cap for a fee of 3 percent of notional principal valued at $10 million, with an interest rate ceiling of 11 percent and LIBOR as the index representing the market interest rate....
1. Is LIBOR replacement has the biggest impact on banks 2. Can you discuss the relationship about LIBOR replacement from between 2008 Credit Crunch and Barclays scandal?
1. What are some of the causes for the banking crisis that began in 2008? 2. What is the role of the FDIC? 3. How does a debit card differ from a credit card?
An interest rate swap has three years of remaining life. Payments are exchanged annually. Interest at 3% is paid and 12-month LIBOR is received. A exchange of payments has just taken place(ie. Year 0). The one-year, two-year and three-year LIBOR/swap zero rates are 2%, 3% and 4%. All rates areannually compounded. What is the value of the swap as a percentage of the principal when OIS and LIBOR rates are the same(round the percentage value to nearest two decimal points)
1- A brief overview and historical timeline with the key players contributing to the 2008 crisis. Provide bullet points with key factors / dates. 2-Key learnings - Perform research and reflect upon what happened to include some ideas or recommendations on what could have been done to reduce the severity and global impact of the 2008 crisis. Consider some key risks and related impact. Consider who was responsible, or who should have been more responsible (i.e. financial institutions, government, central...
1. True or False: The FOMC wishes to increase the discount rate by 25bps – if the current rate is 2.500%, the new rate will be 2.500% x (1 + 25bps) = 2.500% x (1 + 25%) or 3.125%. 2. Empirically, the mortgage rate in the United States has the highest correlation with which market interest rate? A. Credit Default Swap Rate1 B. Prime C. LIBOR D. Yield on the US government’s ten-year bond E. Fed funds’ rate 3. True...
Explain in detail Pre-2008 Policy Tools 1. required reserve ratio 2. discount rate 3. open market operations
1. A 1-year floating-rate note pays three-month LIBOR plus 1%. The floater is priced at 98 per 100 of par value. Calculate the discount margin for the floater assuming that three-month LIBOR is constant at 2%. Assume the 30/360 day-count convention, A. 1.2659% B. 3.0637% C. 3.0765% 2. The following are two statements About a callable bond: Statement 1: "The borrower of the callable bond has the right to repurchase the bond at a specific price." Statement 2: "A callable...