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:

Flat Database

A type of database that is often represented as a list or simple table.

Microsoft Excel

A spreadsheet program developed by Microsoft that allows users to organize, format, and calculate data with formulas using a system of cells arranged in rows and columns.

Database Administrator

A person responsible for the installation, configuration, upgrade, administration, monitoring, and maintenance of databases in an organization.