Prime rate

Definition:

The interest rate at which banks lend to their best (prime) customers. More often than not, a bank's most creditworthy customers borrow at rates below the prime rate.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Mortgage bond

A bond in which the issuer has granted the bondholders a lien against the pledged assets. See: Collateral trust bonds

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