Which of the Below Statements Is TRUE

question 34

Multiple Choice

Which of the below statements is TRUE?

• A) Vanilla or generic swaps have evolved as a result of the asset / liability needs of borrowers and lenders.
• B) A nonamortizing swap is one in which the notional principal amount decreases in a predetermined way over the life of the swap.
• C) An amortizing swap is one in which the notional principal amount increases at a predetermined way over time.
• D) In a generic or plain vanilla swap, the notional principal amount does not vary over the life of the swap.

---

Definitions:

Monopsonistic Employer

A single buyer, typically an employer, that controls the market for its labor and thus can influence wages and employment terms.

Competitive Market

A market structure characterized by many buyers and sellers, where no single entity can influence price, promoting efficiency and innovation.

Labor Union Membership

The status of being a member of an organization that represents workers' interests, including wages, working conditions, and benefits.

Union Member

An individual who belongs to a labor union, an organization that represents workers' interests in bargaining and negotiations with employers.