When a Bank Participates in a Swap of Fixed Interest

question 13

Multiple Choice

When a bank participates in a swap of fixed interest rate payments for floating-rate payments, or a swap of currencies, it

• A)can match up two parties but cannot take a position in the swap.
• B)can match up two parties or can take a position in the swap.
• C)cannot match up two parties and cannot take a position in the swap.
• D)cannot match up two parties but can take a position in the swap.

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Definitions:

Cost

The amount of money or resources expended to acquire an asset, produce a product, or provide a service.

Markup Percent

The additional percentage on the base cost of merchandise to accommodate for overhead and yield profit.

Selling Price

The amount of money for which a product or service is sold to the customer.

Cost

The amount of money required to purchase, produce, or maintain something.