Consider a Situation Where the Duration of the Fixed Portion

question 19

Multiple Choice

Consider a situation where the duration of the fixed portion of a swap is greater than the floating portion of a swap.Which of the following statements is most correct?

• A)The fixed-rate payers gain when rates fall.
• B)The market value of fixed-rate payments will decrease by more than the market value of floating-rate payments when interest rates fall.
• C)The market value of fixed-rate payments will decrease by more than the market value of floating-rate payments when interest rates rise.
• D)The floating-rate payers gain when rates rise.
• E)The market value of the swap will increase with an increase in interest rates.

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Definitions:

Aggressive Impulses

The sudden urges or drives to act or respond in a hostile or physically violent manner.

Testosterone

A steroid hormone found in both men and women but at higher levels in men, playing a key role in the development of male reproductive tissues and secondary sexual characteristics.

Hormone

A chemical substance produced in the body that regulates and controls the activity of certain cells or organs.

Affective Aggression

A type of aggression that is driven by emotions, particularly anger or hostility, rather than by a strategic desire to achieve a specific goal.