Interest Rate Swaps

question 18

Multiple Choice

Interest rate swaps: 

• A) are a group of option contracts with varying expiration dates.
• B) are rarely used by U.S. business firms.
• C) can involve exchanging one floating-rate loan for another floating-rate loan.
• D) require two firms to have access to loans with equivalent terms.
• E) are all based on the U.S. T-bill index.

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Definitions:

Negative Punishment

The removal of a desirable stimulus after a behavior, which decreases the likelihood of the behavior occurring again.

Positive Punishment

Adding an undesirable stimulus to decrease a behavior; for example, scolding a pet to stop it from engaging in unwanted behavior.

Frequency

The rate at which something occurs or is repeated over a particular period of time or in a given sample.

Misbehavior

Actions or conduct that are inappropriate, disruptive, or violate social norms or rules.