Why Might an Individual or Organization Be Willing to Swap

question 72

Multiple Choice

Why might an individual or organization be willing to swap fixed-rate loans for floating-rate loans?

• A)They may perceive that interest rates are ready to increase
• B)Their cash flows may vary directly with interest rates
• C)Floating rates are lower than fixed rates
• D)They may be able to postpone the payment of principal

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Definitions:

Perceptions of Fairness

The subjective judgment by individuals about the equity and fairness of treatment received in a social setting or organization.

Types of Justice

This term encompasses the various forms of fairness and equity, including distributive justice, procedural justice, and interactional justice, as they apply in social and organizational contexts.

Senior Executives

High-ranking officers within an organization, typically responsible for making strategic decisions, leading the company, and ensuring operational success.

Financial Issues

Problems or challenges related to managing money, including budgeting, investing, debt, and cash flow impacting individuals or organizations.