You Have Entered into a Swap Where You Receive the Fixed

question 11

Multiple Choice

You have entered into a swap where you receive the fixed rate and pay the floating rate.What is the best way to hedge interest-rate risk in this swap from among the following choices?

• A)Add a long position in fixed rate bonds.
• B)Add a short position in interest-rate futures.
• C)Add a basis (i.e. ,floating-floating)swap.
• D)Add a short position in FRAs.

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Definitions:

Fine Motor Skills

The ability to use small muscles, specifically in the hands and fingers, for tasks like writing, buttoning, and cutting, developing throughout early childhood.

Head Motions

Movements of the head that can be voluntary or involuntary, used in non-verbal communication or as part of physical activity.

Large Movements

Broad, impactful social, political, or cultural shifts that influence large populations or regions.

Fine Motor Skills

Fine motor skills involve the coordination of small muscles in movements—usually involving the synchronization of hands and fingers—with the eyes.