A. increase in LIBOR
B. decrease in LIBOR
C. increase in KIBOR
D. decrease in KIBOR
✅ The correct answer is option A.
In Eurodollar market, increase in demand of Euro dollars results in increase in LIBOR. Deposits from overnight out to a week are priced based on the fed funds rate. Prices for longer maturities are based on the corresponding London Interbank Offered Rate (LIBOR).
In Eurodollar market, increase in demand of Euro dollars results in increase in LIBOR. Deposits from overnight out to a week are priced based on the fed funds rate. Prices for longer maturities are based on the corresponding London Interbank Offered Rate (LIBOR).