If a Dealer Has Any Intention of Assigning an Interest

question 20

Multiple Choice

If a dealer has any intention of assigning an interest rate swap to a third party soon after transacting that swap:

• A) The dealer should not reveal his future dealing intentions to his counterparty.
• B) The dealer should make his intention to assign clear before transacting.
• C) The dealer should agree the method of assignment before transacting.
• D) The counterparty should specify whether or not assignment would be acceptable in negotiations.

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Definitions:

Liquidated Damages

A predetermined amount of money that must be paid as damages for failure to perform under a contract.

Identified Before Breach

A legal term referring to goods specified by the buyer and seller in a contract for sale before any default occurs.

Nominal Damages

A small amount of money awarded by a court to recognize that a legal wrong has occurred, but no substantial harm was done.

Compensatory Damages

Monetary compensation awarded to a plaintiff to offset losses or injuries that have occurred as a result of the defendant's actions.