Which of the Following Describes the Five-Year Swap Rate

question 3

Multiple Choice

Which of the following describes the five-year swap rate?

• A) The rate on a five-year loan to a AA-rated company
• B) The rate on a five-year loan to an A-rated company
• C) The rate that can be earned over five years from a series of short-term loans to AA-rated companies
• D) The rate that can be earned over five years from a series of short-term loans to A-rated companies

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Definitions:

Unearned Management Fees

Income received by a company for services yet to be performed and is recorded as a liability until those services are delivered.