Which One of the Following Terms Is Correctly Identified

question 12

Multiple Choice

Which one of the following terms is correctly identified?

• A) Caption: a price cap on a call option.
• B) Floor: a call option on an interest rate.
• C) Derivative: an asset with a value that is derived from some specified future event.
• D) Swaption: an option to exchange a floating-rate loan for a fixed-rate loan.
• E) Cross-hedge: an agreement to exchange specified cash flows at specified time intervals in the future.

---

Definitions:

Crucial Influence

Refers to a significant effect or control that something or someone has on the outcome of events or decisions.

Family

A socially recognized group, typically bound by blood, marriage, or adoption, that forms an emotional connection and an economic unit of society.

Assuming Responsibility

The act of taking ownership for one’s actions or decisions, acknowledging the impact on oneself and others.

Self-Control

The ability to regulate one's emotions, thoughts, and behaviors in the face of temptations and impulses.