The article analyzes interest rate modeling and portfolio risk using the LIBOR Market Model. It compares the Norwegian and American markets, finding a strong correlation. Risk estimates are calculated using Monte Carlo simulations, with a focus on Value at Risk and Expected Shortfall. Different approaches are studied to capture true volatility and correlation. The risk measures were unable to predict the Financial Crisis, with losses exceeding estimates during that time. The Exponentially Weighted Moving Averages method performs better than Floating Averages in estimating risk. Despite underestimating risk, the estimates can still be used in investment strategies, although they are sensitive to the chosen risk threshold.