Which of the Following Describes a 3-Month Overnight Indexed Swap

question 7

Multiple Choice

Which of the following describes a 3-month overnight indexed swap (OIS) ?

• A) A fixed rate is exchanged for the overnight rate every day for three months
• B) LIBOR is exchanged for the overnight rate every day for three months
• C) The arithmetic average of overnight rates is exchanged for a fixed rate at the end of three months
• D) The geometric average of overnight rates is exchanged for a fixed rate at tehe end of three months

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Definitions:

Equity Reporting

The process of disclosing information regarding the equity or owner's interest in a company, typically within financial statements.

Statement of Members' Equity

A financial document showing the changes in the equity of a company over a specific period due to various factors like earnings and withdrawals.

Dissolution

The process of legally dissolving a corporation or partnership, involving the cessation of its business operations and the distribution of its assets.

General Partnership

A business structure where two or more individuals share ownership, responsibilities, profits, and liabilities.