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Introduction To Finance

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Week Two: The Assignment

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What is LIBOR?

The London Interbank Offered Rate is known under the name of LIBOR. It is the most active interest rate market in the world, and that is why LIBOR applies not only to the Pound Sterling, but also to major currencies such as the US Dollar, Swiss Franc, Japanese Yen and Canadian Dollar.
LIBOR is determined by rates that banks participating in the London money market offer each other for short-term deposits, and it is used in determining the price of many other financial derivatives.

What is the Prime Rate?

Prime rate is a concept generally used in many countries to a reference interest rate used by banks. The term originally indicated the rate of interest at which banks lent to favored customers, i.e., those with high credibility.
We can also give Prime Rate the following definition: The interest rate that commercial banks charge their most creditworthy borrowers, such as large corporations.

What does an Income Statement tell you about a company?

Income Statement is the accounting of sales, expenses, and net profit for a given period.
It tells you all about the economic and financial health of a company.