Question

1. Define eurodollar deposits.             2. Define LIBOR. 3. What is a “euro-euro” deposit?

1. Define eurodollar deposits.

           

2. Define LIBOR.

3. What is a “euro-euro” deposit?

Homework Answers

Answer #1
  1. A Eurodollar deposit can be defined as a deposit of money in United States dollar placed with a bank outside the United States. A deposit is inten with a bank for safe keeping and possibly to earn interests on that deposit.
  2. LIBOR stands forLondon Interbank Offered Rate. It can be defined as the benchmark interest rate set. It is charged by the banks defined period of time. It may be for overnight, one-month, three-month, six-month and annually.
  3. A euro deposit can be defined as a deposit of foreign funds into a bank that operates as per the European banking system. These banks function on the consolidation of European currency. When an external investor deposits foreign currency into one of these banks, they are technically depositing in euro.
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