Consider These Five Statements

question 90

Multiple Choice

Consider these five statements:
i.Swaps can be used to create a synthetic floating rate debt for a company's fixed rate debt.
ii.If an intermediary has arranged a matched swap,it has no net exposure to interest rate risk.
iii.A cross-currency swap differs from an interest rate swap in that,for a cross-currency swap,the principals,as well as the agreed interest obligations,are swapped for the duration of the swap agreement.
iv.With a cross-currency swap,the exchange rate used at the principal re-exchange date is based on the current spot rate at that time.
v.If a bank acts as an intermediary in a swap and does not fund the swap parties' underlying loan facilities,it has no obligation under the bank capital adequacy requirements.
Which of the following are correct?

• A) i, ii, iii and iv are true
• B) ii, iii and iv are true
• C) i, ii and iii are true
• D) i, ii, iii and v are true

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Definitions:

Competitive Advantage

The attributes that allow an organization to outperform its competitors, such as superior quality, cost structure, or customer service.

Competitive Scope

The breadth and range of activities a company undertakes to compete, including geographic reach, product and service segments, and target markets.

Business Ecosystems

A complex network of organizations, including suppliers, distributors, customers, competitors, government agencies, and others involved in the delivery of a specific product or service through competition and cooperation.

Competing

A conflict resolution style where one's own goals are pursued aggressively, sometimes at others' expense, emphasizing assertiveness over cooperativeness.