A Preferred Interest Rate Swap Strategy for a Firm with Variable-Rate

question 48

Multiple Choice

A preferred interest rate swap strategy for a firm with variable-rate debt and that expects rates to go up is to

• A) do nothing.
• B) pay floating and receive fixed.
• C) pay floating and pay fixed.
• D) none of the above.

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Definitions:

Decision Alternatives

The various options or courses of action that can be taken in response to a particular problem or decision-making scenario.

Rational Thought

The process of thinking that is grounded in logic and reason, often characterized by the ability to make clear, reasoned decisions and judgments.

Gender Bias

The tendency to prefer one gender over another, which can manifest in various social, professional, and educational contexts, leading to unequal treatment or perceptions based on gender.

Subjective Utility

The perceived value or benefit of an action or choice to an individual, based on personal preferences and feelings.