One Advantage of Using Swaps to Eliminate Interest-Rate Risk Is

question 40

Multiple Choice

One advantage of using swaps to eliminate interest-rate risk is that swaps

• A) are less costly than futures.
• B) are less costly than rearranging balance sheets.
• C) are more liquid than futures.
• D) have better accounting treatment than options.

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Definitions:

Pain Transmission

The physiological process by which pain signals are relayed from the point of injury through the nervous system to the brain.

Myelinated

Referring to nerve fibers that are covered with a protective, insulating layer called myelin, which helps increase the speed of neural signals.

Information Processing

A cognitive approach that likens the mind to a computer, emphasizing how information is taken in, stored, and retrieved by the brain.

Pheromones

Biologically produced odorants that convey information to other members of the species.