Whereas in the Mid-1980s Swap Spreads Might Have Been 50

question 69

Multiple Choice

Whereas in the mid-1980s swap spreads might have been 50 basis points,a/an _______ basis-point spread is more common today.

• A) 80
• B) 60
• C) 30
• D) 10

---

Definitions:

European Call

A call option that can only be exercised on the expiration date, not before.

Strike Price

The Strike Price is the fixed price at which the owner of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security or commodity.

Derivative Security

A financial instrument whose value is derived from the value of another asset, known as the underlying asset.

Financial Asset

A financial asset refers to any asset that is cash, an equity instrument of another entity, or a contractual right to receive cash or another financial asset from another entity.