When a Strategy Is Put in Place to Limit the Rate

question 283

Multiple Choice

When a strategy is put in place to limit the rate of interest that a firm pays on its debt such that the rate will remain within a stated upper and lower bound, the firm is said to have created an interest rate:

• A) Swap.
• B) Floor.
• C) Cap.
• D) Ceiling.
• E) Collar.

---

Definitions:

Desired Employee Behavior

The specific actions or reactions that an organization encourages and rewards in its employees to achieve its objectives.

Positive Reinforcement

The addition of a rewarding stimulus following a desired behavior, increasing the likelihood of that behavior being repeated.

Punishment

A method used to reduce undesirable behavior by applying negative consequences or removing positive reinforcements.

Improvement Plan

A strategic outline designed to identify areas of performance that need enhancement and to establish specific steps and timelines for achieving those improvements.