What Is the London Interbank Mean Rate (LIMEAN)? The London Interbank Mean Rate (LIMEAN) is the midmarket rate in the London interbank market, which is calculated by averaging the offer rate (LIBOR) and the bid rate (LIBID). The LIBOR is the rate at which funds are sold in the market, while the LIBID is the
What Is Limit Down? Limit down is a decline in the price of a futures contract or a stock large enough to trigger trading restrictions under exchange rules. Limits on the speed of market price movements, up or down, aim to dampen unusual volatility and to give traders time to react to market-moving news, if
What Is a Limited Company (LC)? A limited company (LC) is a general form of incorporation that limits the amount of liability undertaken by the company’s shareholders. It refers to a legal structure that ensures that the liability of company members or subscribers is limited to their stake in the company by way of investments or
What Is a Limited Government? A limited government is one where legalized force is restricted through delegated and enumerated authorities. Countries with limited governments have fewer laws about what individuals and businesses can and cannot do. In many countries, a written constitution is used to spell out the powers and limitations of government power. The
What Is Limited Liability? Limited liability is a type of legal structure for an organization where a corporate loss will not exceed the amount invested in a partnership or limited liability company (LLC). In other words, investors’ and owners’ private assets are not at risk if the company fails. In Germany, it’s known as Gesellschaft
What Is a Limited Partner? A limited partner invests money in exchange for shares in a partnership but has restricted voting power on company business and no day-to-day involvement in the business. A limited partner’s liability for the firm’s debts cannot exceed the amount that they invested in the company. Limited partners are often called
What Is London Interbank Offered Rate (LIBOR)? The London Interbank Offered Rate (LIBOR) is a benchmark interest rate at which major global banks lend to one another in the international interbank market for short-term loans. LIBOR, which stands for London Interbank Offered Rate, serves as a globally accepted key benchmark interest rate that indicates borrowing costs between
What Is the LIBOR Curve? The LIBOR curve is the graphical representation of the interest rate term structure of various maturities of the London Interbank Offered Rate, commonly known as LIBOR. LIBOR is a short-term floating rate at which large banks with high credit ratings lend to each other. The LIBOR curve depicts the yield
What Is LIBOR Flat? LIBOR flat is an interest rate benchmark that is based on the London Interbank Offered Rate (LIBOR). It refers to the LIBOR rate with no additional spread added. In order to adjust for credit risk and other factors, banks and other institutions add (or subtract) a spread to the LIBOR flat
What Is a LIBOR-in-Arrears Swap? A LIBOR-in-arrears swap is similar to a regular or vanilla swap but the floating rate side is set at the end of the reset period instead of the beginning. That rate is then applied retroactively. The quick definition is that a vanilla swap sets the rate in advance and pays later
