A Difference Payment Refers to

question 34

Multiple Choice

A difference payment refers to

• A) the different notional principal amounts on the two sides of a swap.
• B) the change in margin account due to daily marking to market on a futures position.
• C) the amount an option is in the money.
• D) the net payment amount on a collar.
• E) the net amount owed on a swap payment date between the swap parties.

---

Definitions:

Greenmail

A strategy where a company buys back its shares from a potential acquirer at a premium to avoid a takeover bid.

Hostile Takeover

The acquisition of one company by another without approval from the target company's management.

Market Price

The contemporary market cost for acquiring or disposing of assets or services.

Chapter 11 Bankruptcy

A legal process that allows businesses to reorganize under bankruptcy laws of the United States, enabling them to keep operating while restructuring their debts.