A ____ Swap Involves the Exchange of Fixed-Rate Payments for Floating-Rate

question 3

Multiple Choice

A ____ swap involves the exchange of fixed-rate payments for floating-rate payments that are capped.

• A)rate-capped
• B)zero-coupon-for-floating
• C)callable
• D)putable

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Definitions:

Cumulative Preferred Stock

A type of preferred stock whose dividends accumulate if not paid in the agreed periods.

Par Value

The nominal or face value of a stock or bond as stated by the issuer, often used in the accounting of capital accounts.

Dividend

A share of a company's profits paid out to its shareholders, typically in the form of cash or additional stock.

Cumulative Preferred Stock

A type of preferred stock where missed dividend payments accumulate and must be paid out before any dividends can be issued to common stockholders.