Answer: b) A Treasury rate is a necessarily a United States (US) government rate

The false statement is **b)**. - **a)** is true: derivatives traders often prefer LIBOR to Treasury bills because LIBOR better reflects unsecured interbank funding costs. - **c)** is true: LIBOR is the lending rate offered by banks, while LIBID is the borrowing/bid rate, so LIBOR is typically higher. - **d)** is true: for the same effective rate, the nominal discrete-compounding rate is higher than the continuously compounded rate. - **b)** is false because the term **Treasury rate** does not necessarily imply a US government rate; it can refer to government bond yields in other countries as well. Therefore, the correct answer is **b)**.

Author: Manit Arora