What Change in Cash Flows Will Occur to the Fixed

question 2

Multiple Choice

What change in cash flows will occur to the fixed rate payer at settlement, in an interest rate swap agreement, when market interest rates rise?

• A) An increase in cash received
• B) A decrease in cash received
• C) No change in cash received
• D) It cannot be determined based on the information given

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Definitions:

Precontemplation

The stage of change in which an individual is not yet considering change or is unaware of the need to change.

Preparation

The action or process of getting something ready for use or consideration, involving planning and arrangement.

Avoid Social Situations

The act of intentionally staying away from events or places where people gather, often due to anxiety, discomfort, or personal preference.

Drinking Alcohol

The act of consuming beverages that contain ethanol, which can affect social behavior and physical health.