Which of the Following Is True for the Party Paying

question 16

Multiple Choice

Which of the following is true for the party paying fixed in an interest rate swap?

• A) There is more credit risk when the yield curve is upward sloping than when it is downward sloping
• B) There is more credit risk when the yield curve is downward sloping than when it is upward sloping
• C) The credit exposure increases when interest rates decline
• D) There is no credit exposure providing a financial institution is used as the intermediary

---

Definitions:

Email Addresses

Unique identifiers for an email account that allow for the sending and receiving of digital messages.

Appropriate

Suitable or proper in the circumstances.

Résumé

A document summarizing an individual's work experience, education, skills, and accomplishments, often used as part of a job application.

Target Readers

A specific group of people whom content is aimed at, based on various factors such as age, interests, and demographics.