The Floating-Rate Payer in a Swap Would Most Likely Want

question 8

Multiple Choice

The floating-rate payer in a swap would most likely want to buy an interest-rate:

• A)floor.
• B)cap.
• C)collar.
• D)deposit contract.
• E)futures contract.

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Definitions:

Government Subsidy

A government subsidy is financial assistance provided by the government to individuals, organizations, or industries to encourage or protect certain activities or products.

Market Price

The existing market rate for acquiring or selling a service or asset in the open market.

Subsidy

Financial assistance provided by the government or a public body to support businesses, reduce prices, or encourage a particular economic activity.