In a ________, the Party That Wants Out of the Transaction

question 62

Multiple Choice

In a ________, the party that wants out of the transaction will arrange for an additional swap in which (1) the maturity on the new swap is equal to the time remaining of the original swap, (2) the reference rate is the same, and (3) the notional principal amount is the same.

• A) swap sale
• B) swap buy-back
• C) close-out
• D) swap reversal

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Definitions:

Group Incentive System

A compensation system that rewards a group of employees for achieving certain performance targets, designed to foster teamwork and collective achievement.

Gainsharing

A program where employees receive financial rewards based on the performance improvement or cost-savings achievements of their work group.

Productivity

The measurement of efficiency of production, especially in terms of output per unit of input.

Cost Savings

The reduction in expenses achieved through efficiency improvements, negotiation, or eliminating wasteful practices.