Which of the Following Is Not True About Interest Rate

question 81

Multiple Choice

Which of the following is not true about interest rate swaps?

• A) Payments are based on a notional principal.
• B) Floating rate payers profit if interest rates fall.
• C) Payments can be quarterly as well as semi-annually.
• D) Parities exchange debt obligations.
• E) Default risk is a possibility in the swaps market.

Understand the computation of the effective annual rate for factoring receivables.

Compute the duration it takes for a company to pay its suppliers.

Determine the average collection period for accounts receivable.

Adjust and analyze the impact on the cash cycle due to operational changes.

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