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.”
—William York Tindall (1903–1981)
“I don’t know but a book in a man’s brain is better off than a book bound in calf—at any rate it is safer from criticism. And taking a book off the brain, is akin to the ticklish & dangerous business of taking an old painting off a panel—you have to scrape off the whole brain in order to get at it with due safety—& even then, the painting may not be worth the trouble.”
—Herman Melville (1819–1891)