Which of the Following Describes the Five-Year Swap Rate

question 1

Multiple Choice

Which of the following describes the five-year swap rate?

• A) The fixed rate of interest which a swap market maker is prepared to pay in exchange for LIBOR on a 5-year swap
• B) The fixed rate of interest which a swap market maker is prepared to receive in exchange for LIBOR on a 5-year swap
• C) The average of A and B
• D) The higher of A and B

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Definitions:

Preestablished Harmony

A philosophical doctrine proposed by Leibniz suggesting that every substance is in perfect coordination with all others by virtue of God's preordained harmonious plan.

Mental Events

Phenomena that occur within the mind or consciousness, including thoughts, feelings, beliefs, and intentions.

Physical Events

Occurrences or phenomena that involve changes in the state or motion of physical objects.

Solipsism

The view that we can know only of the existence of our own minds: sometimes called the egocentric predicament.