A Corporation with Long-Term Fixed-Rate Debt Might Prefer Floating-Rate Debt

question 113

Multiple Choice

A corporation with long-term fixed-rate debt might prefer floating-rate debt if they thought that:

• A)Interest rates would be declining
• B)Interest rates would be increasing
• C)Their bond rating might be lowered
• D)Their bonds were going to be converted into equity

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Definitions:

Chiral

Describes a molecule that cannot be superimposed on its mirror image, often leading to different chemical behaviors for each form.

Achiral

Describes a molecule that is superimposable on its mirror image, lacking chirality and, therefore, lacking enantiomers.

Diastereomers

Stereoisomers which are not reflections of one another and possess distinct physical and chemical characteristics.

Cis-1,2-dimethylcyclopentane

An isomer of dimethylcyclopentane where the two methyl groups are on the same side of the ring structure, leading to specific stereochemical properties.