If a US Institution in a Forward Swap Would Like to Lock

question 44

Multiple Choice

If a U.S. institution in a forward swap would like to lock in the fixed rate that it will pay when the swap period begins, it is probably concerned that interest rates will ____; the counterpartyis likely adversely affected by ____ interest rates.

• A) increase; increasing
• B) increase; declining
• C) decrease; declining
• D) decrease; increasing
• E) none of the above

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Definitions:

Cultural Heritage

The heritage of tangible objects and non-material qualities passed down from previous generations, preserved today, and passed on for the future welfare of a society or group.

Adaptation

The process by which organisms adjust to changes in their environment to ensure survival.

Objective Thoughts

Thinking that is based on factual evidence and uninfluenced by personal feelings or opinions.

Nature Versus Nurture

A debate concerning the relative importance of an individual's innate qualities ("nature") versus personal experiences ("nurture") in determining or causing differences in physical and behavioral traits.