Reference Rate

A reference rate is a rate that determines pay-offs in a financial contract and that is outside the control of the parties to the contract. It is often some form of LIBOR rate, but it can take many forms, such as a consumer price index, a house price index or an unemployment rate. Parties to the contract choose a reference rate that neither party has power to manipulate.

Read more about Reference Rate:  Examples of Use, Reference Rates For Short Term Interest Rates

Famous quotes containing the words reference and/or rate:

    If we define a sign as an exact reference, it must include symbol because a symbol is an exact reference too. The difference seems to be that a sign is an exact reference to something definite and a symbol an exact reference to something indefinite.
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    At the rate science proceeds, rockets and missiles will one day seem like buffalo—slow, endangered grazers in the black pasture of outer space.
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