Suppose the Premium on a Three Year,four Percent Floor Is

question 21

Multiple Choice

Suppose the premium on a three year,four percent floor is equal to the premium on a three year,eight percent cap.This combination is referred to as

• A) Zero-cost warrant
• B) Zero-premium strap
• C) Zero-cost collar
• D) Zero-premium swap
• E) Zero-cost FRA

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Definitions:

Simple Decay

The fading of memory traces due to the mere passage of time without rehearsal.

Tip-of-the-Tongue Phenomenon

A temporary inability to retrieve a word from memory, accompanied by a feeling that retrieval is imminent.

Retrieval

The process of getting information out of memory storage.

Acquisition

The process of acquiring or gaining knowledge, skills, or behaviors through learning or experience.