You Have the View That Rates Will Be Rising Over

question 34

Multiple Choice

You have the view that rates will be rising over time.What is thebest kind of swap to exploit this view from among the following alternatives?

• A)Pay fixed,receive floating.
• B)Pay floating,receive fixed.
• C)A maturity-mismatch basis swap in which you pay floating indexed to three-month Libor and receive fixed indexed to six-month Libor.
• D)Pay fixed,receive floating on a reverse-amortization swap.

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Definitions:

Social Reality

The complex web of social norms, beliefs, and structures that shape our perception of the world and influence human behavior.

Assumptions

are accepted beliefs or statements taken for granted without proof, often forming the basis for arguments or decision-making.

Macrosociology

An approach in sociology that analyzes societies, systems, and populations on a large scale, focusing on social structures and institutions.

Economic Structures

The organization and interrelationship of different economic sectors and institutions within a society, shaping the distribution of resources and wealth.