Examlex
Which of the following statements about a swap instrument is correct?
A. A company may seek to swap a short-term loan for a long-term loan (or vice versa). Another type of swap is where a company swaps a loan denominated in local currency for a foreign currency loan. After the swap agreement has been made, the primary borrower no longer has a commitment to the primary lender.
B. A company may seek to swap a fixed interest loan for a variable rate interest loan (or vice versa). Another type of swap is where a company swaps a loan denominated in local currency for a foreign currency loan. After the swap agreement has been made, the primary borrower still has a commitment to the primary lender should the other party to the swap default on the arrangement.
C. A company may seek to swap a compound interest loan for a simple interest rate loan (or vice versa). Another type of swap is where a company swaps a fixed interest rate loan for a variable interest rate loan (or vice versa). The swap agreement is enforceable by both parties and the risk of default by either party is minimal.
D. A company may seek to swap a short-term loan for a long-term loan (or vice versa). Another type of swap is where a company swaps a portion of its shares for the shares in another company. After the swap agreement has been made, the relationship between the two companies is stronger and can form the basis of an ongoing strategic alliance.
E. None of the given answers.
Conditioned Response
A learned response to a previously neutral stimulus that has become conditioned through association with an unconditioned stimulus.
Contextual Cues
are environmental or situational factors that affect behavior by signaling the appropriateness of certain responses.
Overdose
The ingestion or application of a substance in quantities greater than are recommended or generally practiced, leading to a serious or lethal toxic state.
Heroin
An opiate drug processed from morphine that is illegal in many countries, known for its potent addictive properties and euphoric effects.
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