An Option Granted by the Seller That Gives the Buyer

question 291

Multiple Choice

An option granted by the seller that gives the buyer the right to enter into an underlying interest rate swap transaction is ca lied:

• A) a swap
• B) a cap
• C) a swaption
• D) a collar

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Definitions:

Oceanic Crust

The part of Earth's lithosphere that underlies the ocean basins, composed primarily of basalt and gabbro.

Magnetic Reversals

A phenomenon where Earth's magnetic field changes direction, with magnetic north and south poles swapping places.

Seafloor Spreading

A process occurring at mid-ocean ridges, where new oceanic crust is formed through volcanic activity and then gradually moves away from the ridge.

Youngest Oceanic Crust

The most recently formed areas of the ocean floor, typically found at mid-ocean ridges where tectonic plates are diverging and new crust is being created by volcanic activity.