In a Fixed-For-Floating Interest Rate Swap

question 58

Multiple Choice

In a fixed-for-floating interest rate swap:

• A)Counter-party A pays Counter-party B an amount calculated according to a floating interest rate in return for an amount calculated on the basis of a fixed interest rate.
• B)The amounts payable depend on the notional principal.
• C)Only interest flows are involved until maturity,when the principal is exchanged based on the difference in the amounts calculated according to a floating interest rate and a fixed interest rate.
• D)Counter-party A pays Counter-party B an amount calculated according to a floating interest rate in return for an amount calculated on the basis of a fixed interest rate and the amounts payable depend on the notional principal.

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Definitions:

Human Capital Investment

The process of increasing the value of a workforce through education, training, and health improvements.

Technologies

The application of scientific knowledge for practical purposes, especially in industry and everyday life.

Resource Endowments

The natural resources, capital, and human skills that a country or region possess, which can influence its economic development and trade patterns.

IACs

Industrialized Advanced Countries, a term sometimes used to refer to economically developed countries with high levels of industrialization.