A Position in an Interest Rate Swap Can Be Interpreted

question 56

True/False

A position in an interest rate swap can be interpreted as a position in a package of forward contracts but not in a package of cash flows from buying and selling cash market instruments.

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Definitions:

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a pause, without new learning trials.

Higher-Order Conditioning

A process in classical conditioning by which a stimulus that was previously neutral is paired with a conditioned stimulus to produce the same conditioned response as the original conditioned stimulus.

Extinction

In biology, the end of an organism or of a group of organisms, normally a species; in psychology, the process through which a conditioned response is eliminated through repeated exposure without reinforcement.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers an unconditioned response without prior conditioning.