Which of the Following Is False

question 81

Multiple Choice

Which of the following is false?

• A)Swaps allow two parties to hedge interest rate risk for a long period of time, often up to say 15 years.
• B)Interest rate swaps allow two parties to trade interest rate streams so that inflows more closely match outflows.
• C)A fall in interest rates will hurt an intermediary that is holding fixed rate assets and variable rate liabilities.
• D)Swaps originated in 1982.

---

Definitions:

Principal Repaid

The amount of loan or debt's original borrowing that has been or is being paid back, excluding interest payments.

Long-Term Notes

Debt securities or loans with maturities extending beyond one year, typically used for long-term financing needs.

Gift Card Expense

The cost recognized by a company when a gift card is redeemed, reflecting the reduction in liability and recognition of revenue or expense.

Redeemed

The process of paying off or buying back something, often referring to repaying the principal amount of bonds or preferred stocks.