Does LMM stand for
Does LMM stand for? Explain.
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The LIBOR Market Model (LMM), also termed as the BGM or BGM/J model, it is a model for the stochastic evolution of forward interest rates. Its major strength over other interest rate models is that this describes the evolution of forward rates which exist, at market-traded maturities, when opposed to theoretical constructs like the spot interest rate.
Company A is a AAA-rated firm wanting to issue five-year FRNs. It determines that it can issue FRNs at six-month LIBOR + 1/8 percent or at the six-month Treasury-bill rate + ½ percent. Specified its asset structure, LIBOR is the preferred index. Comp
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