Which of the Following Is a Five-Year Interest Rate Swap

question 12

Multiple Choice

Which of the following is a five-year interest rate swap that can be canceled at the two year point?

• A) The difference between two plain vanilla interest rate swaps
• B) The difference between a plain vanilla interest rate swap and a forward start swap
• C) A regular interest rate swap plus a European swap option
• D) A regular interest rate swap plus a Bermudan swap option

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Definitions:

Elliptical

Having an oval shape or relating to an ellipse; also used metaphorically to describe speech or writing that is obscure or lacks completeness.

Perceptual Constancy

The brain's ability to perceive objects as unchanging despite changes in viewing conditions, such as distance or lighting.

Retinal Images

Images formed on the retina of the eye as the result of the refraction of light by the cornea and lens.

Relative Size

A perceptual cue that allows the determination of depth and distance by comparing the size of objects with known sizes.