In an Interest Rate Swap,the Party Who Is the Fixed-Rate

question 14

Multiple Choice

In an interest rate swap,the party who is the fixed-rate payer:

• A) currently has fixed-rate obligations, but prefers floating.
• B) currently has floating-rate obligations, but prefers fixed.
• C) receives a fixed-rate payment if interest rates increase.
• D) pays a floating-rate payment if interest rates increase.

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Definitions:

Receptor Site

Specific regions on a cell surface or within a cell where chemicals, such as hormones or neurotransmitters, can bind to elicit a physiological response.

Pharmacodynamic

pertains to the study of the biochemical and physiological effects of drugs and their mechanisms of action.

Analgesic

A class of drugs designed to relieve pain without causing loss of consciousness.

Tylenol

A popular brand name for acetaminophen, a medication used to reduce fever and relieve pain.