Swapping an Obligation to Pay Interest at a Specified Fixed

question 32

Multiple Choice

Swapping an obligation to pay interest at a specified fixed or floating rate for payments representing the total return on a loan or a bond of a specified amount is an example of

• A)a commodity swap.
• B)a credit swap.
• C)a currency swap.
• D)an equity swap.
• E)an interest rate swap.

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Definitions:

Operating Loss Carryback

A tax provision that allows a company to apply a current year's net operating losses to past profit years to obtain a tax refund.

Operating Loss Carryforward

Future reductions in taxable income allowed due to losses incurred in previous periods.

Temporary Differences

Differences between the book basis and tax basis of an asset or liability that result in taxable or deductible amounts in future years.

Intraperiod Income Tax Allocation

The process of assigning income tax expenses or benefits to different components of comprehensive income within the same financial period.