Consider the Following Five Statements

question 62

Multiple Choice

Consider the following five statements:
i.Swaps may be used to achieve a lower cost of funds for a company.
ii.In an interest rate swap,the two parties swap the principal amount plus the ongoing associated interest obligations.
iii.An intermediated swap is said to be 'matched' when a bank enters into swaps with both firms involved in an interest rate swap.
iv.A 'plain vanilla' swap is the fixed AUD to floating AUD swap.
v.If an intermediary is involved in a swap between two parties,the intermediary will also provide the initial loan to both parties.
How many of these statements are true and how many are false?

• A) 3 statements are true and 2 are false
• B) 2 statements are true and 3 are false
• C) 4 statements are true and 1 is false
• D) 1 statement is true and 4 are false

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Definitions:

Needle Deflects

The movement of a needle on a gauge or dial, typically indicating a change in pressure, speed, or other measurement.

Driveshaft Tube Ratings

Specifications indicating the maximum torque a driveshaft tube can safely transmit without risk of failure or damage.

Linehaul Highway Tractors

Large trucks designed for long-distance hauling of goods typically over highways, part of the freight and logistics sector.

Torsional Vibrations

Oscillations of an object in a rotational manner around its axis due to alternating torque or twisting forces.