London Interbank Offer Rate
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FlashcardsLondon Interbank Offer Rate
LIBOR rate was a global benchmark interest rate that major global banks used when loaning each other money for short periods of time
Secured Overnight Financing Rate
SOFR
The rate used for borrowing cash just for a day
It is used by banks to manage short term funding needs and adjust their liquidity
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London Interbank Offer Rate
LIBOR rate was a global benchmark interest rate that major global banks used when loaning each other money for short periods of time
Secured Overnight Financing Rate
SOFR
The rate used for borrowing cash just for a day
It is used by banks to manage short term funding needs and adjust their liquidity
US Treasury Yields
Federal Funds Rate
Credit Default Swap
A financial derivative given to bondholders as a protection against a borrower defaulting on their debt obligations
A CDS is a contract between two parties where on party (the buyer), pays periodic fees to the other party (the seller) in exchange for protection against the default of a specific debt.
A person who gets a credit default swap, seeks protection against the risk that a borrower will default on their debt, while the seller providers this protection and gets periodic payments
In the case of default on debt, the buyer of a CDS would receive compensation from the seller of the CDS.
How do you calculate the terminal value in a DCF valuation?
Discounted Cash Flow Valuation