Why Might an Individual or Organization Be Willing to Swap

question 18

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 not lower than fixed rates.
• D) They may be able to postpone the payment of principal.

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Definitions:

Tracheotomy

A surgical procedure that involves creating an opening in the neck straight into the trachea to aid breathing.

Laryngectomy

A surgical procedure to remove the larynx, often due to cancer, which may result in the loss of voice.

Laryngoscope

A medical instrument used to obtain a view of the vocal folds and the glottis, which is the space between the vocal cords.

Laryngoscopy

A diagnostic procedure that uses a special instrument called a laryngoscope to view the throat and larynx.