Both Parties in an Interest Rate Swap Normally Are Fully

question 3

True/False

Both parties in an interest rate swap normally are fully hedged against interest rate risk on the notional amount of the swap.

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Definitions:

Price

The amount of money expected, required, or given in payment for something.

Omission Bias

The tendency to judge harmful actions as worse, or less moral, than equally harmful inactions (omissions).

Status Quo Bias

The tendency for individuals to prefer for things to stay the same by doing nothing or by sticking with a decision made previously.

Default Option

A pre-selected choice among a set of options that will be applied if no alternative is specified by the decision-maker.