If a Company That Had a Fixed-Rate Liability Wanted to Achieve

question 6

Multiple Choice

If a company that had a fixed-rate liability wanted to achieve a floating-rate cost of funds through a swap,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.