Which of the Following Statements Is TRUE If You Wish

question 10

Multiple Choice

Which of the following statements is TRUE if you wish to compare two sets of fixed base relatives with different bases?

• A) The bases of both sets should be altered to equal 100 for the most recent time period
• B) The base of one set should be altered so that figures use the same time period as a base
• C) The time series trend of both data sets should be used to make a comparison
• D) Such a comparison is not possible, new data should be collected using a common base

---

Definitions:

Floating-rate Bonds

Bonds whose interest rate payments adjust periodically based on an underlying benchmark, making them less sensitive to interest rate changes.

Interest Rate Swap

A financial derivative contract in which two parties exchange interest rate payments on a specified principal amount.

LIBOR

The London Interbank Offered Rate, an interest rate average calculated from estimates submitted by the leading banks in London and used as a reference for lending rates worldwide.

Notional Principal

The term refers to the principal amount, or face value, upon which interest payments or financial derivatives are calculated, without the need for physical exchange of the principal sum.