A Put Option on the Level of an Interest Rate

question 46

Multiple Choice

A put option on the level of an interest rate is called an interest rate ____________.

• A) spread
• B) swap
• C) collar
• D) cap
• E) floor

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Definitions:

Controlling Operations

This refers to the process of monitoring, managing, and adjusting a company's or organization's operations to meet set goals and objectives.

Nonoperating Assets

Nonoperating assets are assets that are not essential to the primary business operations and may include investments, unused land, or other assets held for future use.

Operating Assets

Assets used by a business in its day-to-day operations to generate revenue, such as machinery, buildings, and inventory.

Return On Investment

A measure used to evaluate the efficiency of an investment or compare the efficiencies of several different investments, calculated as net profit divided by the cost of the investment.