Which of the Following Statements Is Incorrect

question 7

Multiple Choice

Which of the following statements is incorrect?

• A)Interest rate swaps are sometimes used by financial institutions and other firms for speculative purposes.
• B)A primary reason for the popularity of interest rate swaps is the existence of market imperfections.
• C)Swaps are necessary for some financial institutions to obtain the maturities or rate sensitivities on funds that they desire.
• D)Most financial institutions that anticipate that interest rates will move in an unfavorable direction do not hedge their positions.

---

Definitions:

Common Vision

A shared understanding or agreement among members of an organization or group about future goals and direction.

Committees

Groups of people designated to perform specific functions or tasks within an organization, often consisting of members with relevant expertise.

Functional Areas

Divisions within a business or organization that specialize in particular tasks or operations, such as marketing, finance, or human resources.

Work Groups

Teams within an organization focused on completing specific tasks or projects.