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:
“I think, for the rest of my life, I shall refrain from looking up things. It is the most ravenous time-snatcher I know. You pull one book from the shelf, which carries a hint or a reference that sends you posthaste to another book, and that to successive others. It is incredible, the number of books you hopefully open and disappointedly close, only to take down another with the same result.”
—Carolyn Wells (1862–1942)
“If you could choose your parents,... we would rather have a mother who felt a sense of guilt—at any rate who felt responsible, and felt that if things went wrong it was probably her fault—we’d rather have that than a mother who immediately turned to an outside thing to explain everything, and said it was due to the thunderstorm last night or some quite outside phenomenon and didn’t take responsibility for anything.”
—D.W. Winnicott (20th century)