A Pay-Fixed Interest Rate Swap Can Be Viewed as Equivalent

question 52

Multiple Choice

A pay-fixed interest rate swap can be viewed as equivalent to

• A) A long position in a par valued FRN and a long position in a par valued fixed rate note.
• B) A long position in a par valued FRN and a short position in a par valued fixed rate note.
• C) A short position in a par valued FRN and a long position in a par valued fixed rate note.
• D) A short position in a par valued FRN and a short position in a par valued fixed rate note.
• E) None of the above.

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