Which of the Following Is True

question 13

Multiple Choice

Which of the following is true?

• A) A swaption that gives the holder the right to pay fixed is equivalent to a call option on a bond
• B) A swaption that gives the holder the right to pay fixed is equivalent to a put option on a bond
• C) A swaption that gives the holder the right to pay fixed is equivalent to a put option on one bond combined with a call option on another bond
• D) None of the above

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Definitions:

Resources Exchanged

The process through which different types of resources, including goods, services, information, and money, are traded or swapped among individuals, businesses, or countries.

Input Markets

Markets where firms buy resources, goods, and services that they need in order to produce outputs that will be sold in output markets.

Households Supply

Refers to the goods and services supplied by households, including labor, to the market.

Entrepreneur

An individual who initiates, manages, and assumes the risks of a business venture, aiming to transform innovations into economic goods.