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 Hitler invaded hell I would make at least a favourable reference to the devil in the House of Commons.”
—Winston Churchill (1874–1965)
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—J.L. (John Langshaw)