A Company Enters into an Interest Rate Swap Where It

question 2

Multiple Choice

A company enters into an interest rate swap where it is paying fixed and receiving LIBOR.When interest rates increase,which of the following is true?

• A) The value of the swap to the company increases
• B) The value of the swap to the company decreases
• C) The value of the swap can either increase or decrease
• D) The value of the swap does not change providing the swap rate remains the same

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Definitions:

Declarative Sentence

A type of sentence that makes a statement or assertion, often used to convey information or express an opinion.

Transformational Rule

In linguistics, a rule that takes an input, typically a deep structure, and transforms it into an output, such as a surface structure of a sentence.

Semantics

The branch of linguistics and logic concerned with meaning, including the study of symbols, signs, and the interpretation of linguistic expressions.

Language

Language is a system of communication used by humans, consisting of spoken, written, or signed words and the rules for combining them to convey ideas and feelings.