If a Company That Had a Floating-Rate Liability Wanted to Enter

question 30

Multiple Choice

If a company that had a floating-rate liability wanted to enter into a swap to achieve a fixed-rate cost of funds,it would pay a:

• A) fixed rate to the counterparty and receive a floating rate in return from the counterparty.
• B) floating rate to the counterparty and pay a floating rate to the fixed-rate lender.
• C) floating rate to the counterparty and pay a fixed-rate to the fixed-rate lender.
• D) floating rate to the counterparty and receive a fixed-rate in return from the counterparty.

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Definitions:

Limited Funding

A situation where financial resources are insufficient to meet the needs or ambitions of a project, organization, or initiative.

Police Corruption

Dishonest or fraudulent conduct by police officers, typically involving bribery or the misuse of power.

Drug Traffickers

Individuals involved in the illegal distribution and sale of drugs.

Mollen Commission

An independent commission established to investigate corruption within a police department, particularly noted for its work with the New York City Police Department in the 1990s.