Suppose You Enter into an Interest Rate Swap Where You

question 5

Multiple Choice

Suppose you enter into an interest rate swap where you are receiving floating and paying fixed. Which two of the following is true? choose two)

• A) Your credit risk is greater when the term structure is upward sloping than when it is downward sloping.
• B) Your credit risk is greater when the term structure is downward sloping than when it is upward sloping.
• C) Your credit risk exposure increases when interest rates decline unexpectedly.
• D) Your credit risk exposure increases when interest rates increase unexpectedly.

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Piaget's Theory

A developmental theory by Jean Piaget that outlines how children's cognitive abilities progress through four stages.

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