Investment Terminology

  • Counterparty Risk: in a contractual agreement, the risk that one of the parties to the agreement may not live up to its contractual obligation is called a counterparty risk. The risk applies to all parties to the contract.
  • Federal Funds Rate (or the Fed Funds Rate): it is the rate set by the U.S. Federal Reserve, and which is the basis for interest rate calculations of a variety of loans in the US.
  • Federal Open Market Committee (FOMC): is the branch of the U.S. Federal Reserve Board that determines the direction of monetary policy in the U.S. and sets the Fed Funds Rate.
  • LIBOR: it’s the London Interbank Offered Rate, a rate that is the base rate used to calculate interest rates on loans around the world. Read more here https://www.investopedia.com/terms/l/libor.asp