Define deposit loan rate spread in the eurodollar, Financial Management

Assignment Help:

How does the deposit-loan rate spread in the Eurodollar market compare with the deposit-loan rate spread in the domestic U.S. banking system?  Why?

Answer: The deposit-loan spread in the Eurodollar market is narrower as compared to in the domestic U.S. banking system.  i.e., in the Eurodollar market the deposit rate is greater as compared to the deposit rate of dollars in the U.S. banking system and the lending rate is less.  The Eurodollar market can work at a lower cost than can the U.S. banking system as it is not subject to Federal Reserve Bank reserve needs on deposits or FDIC deposit insurance.


Related Discussions:- Define deposit loan rate spread in the eurodollar

Letter of credit (loc), Letter of Credit (LOC) A popular bank instrumen...

Letter of Credit (LOC) A popular bank instrument begins that a bank has granted the holder an amount of credit equal to the face amount of the L/C. A bank guarantees payment of

Bonds with warrants, Bonds with Warrants: Warrants are usually attached...

Bonds with Warrants: Warrants are usually attached with the bonds or preference shares to attract the investor. The objective is to induce the potential investors to subscribe

Deficit financing, It is the most useful method of promoting economic devel...

It is the most useful method of promoting economic development. It may be used for the development of economic and social overheads such as construction of roads, railways, power p

Assignment, BFN1014 ...

BFN1014 ASSIGNMENT 2 TRI 2 2012 2013

Estimate most recent year-end financial statements, Select a publicly trade...

Select a publicly traded company (preferably manufacturing oriented; do not use a financial services company such as a bank or a bank holding company) and obtain a copy of their mo

Capital gain or loss, An Investor can receive income from this ...

An Investor can receive income from this source when the bonds purchased at discount are held up to maturity or when he sells the bond before ma

Agency policy theorem, How might management try to solve the problems foun...

How might management try to solve the problems found in agency theorem

Common-size balance sheet and income statement, The question to be answere...

The question to be answered is : "Since the 1990 opening of stock exchanges, China started to use financial statements to determine the performance of listed companies. What were c

Common-size analysis, Common-size Analysis • Prepare a Common-size Analy...

Common-size Analysis • Prepare a Common-size Analysis for the Balance Sheet and Income Statement • This should include about 12 accounts in the Balance Sheet and about 10 Inc

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd