In an Interest Rate Swap,______ Gains/gain When the Three-Month BBSW

question 8

Multiple Choice

In an interest rate swap,______ gains/gain when the three-month BBSW rises.

• A) the floating-rate payer
• B) the fixed-rate payer
• C) both floating- and fixed-rate payers
• D) neither floating- nor fixed-rate payers

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Definitions:

Owner's Equity

Owner's equity represents the residual interest in the assets of an entity after deducting liabilities, essentially the net worth of a company.

Withdrawal

The act of taking money out of an account, or the removal of funds from a partnership by a partner for personal use.

Revenues

The full extent of revenue garnered from the commercial activities that are at the core of a company’s operational agenda, particularly through goods or services.

Assets

Resources owned by a company that have economic value and can be used to meet its future obligations.