LIBOR CA FINAL

LIBOR is the LONDON INTERBANK OFFERING RATE. It is the rate at which one bank gives a loan to another bank. It is generally calculated for five major currencies (US$, EUR, GBP, JPY, CHF) for seven periods - 1d, 1week, 1m, 2m, 3m, 6m, 12m.

For example, 6m LIBOR = 8%/8.5% means that
Bank is willing to receive 6m deposits at 8% p.a.
Bank is willing to give out 6m loans at 8.5% p.a.

LIBOR is calculated everyday as an average of all the rates quoted by all the Banks (except the lowest and highest quotation).

LIBOR - London Interbank Offered Rate
MIBOR - Mumbai ....... etc.

For exam purpose remember, 6mL = 8% doesn't mean Annualised Interest is 16%.
8% is per annum. So while calculating use
[8/100 x 6/12]