Consider the Following Five Statements

question 94

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.
Which of the following are correct?

• A) i, ii, iii and iv are true
• B) ii, iii, iv and v are true
• C) ii, and iv are true
• D) i and iii are true

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Definitions:

Value-Based Pricing

A pricing strategy where the price of a product or service is determined primarily by the perceived value to the customer rather than the cost of production.

Useful Life

The expected period of time during which an asset is useful to the owner for the purpose for which it was acquired, often impacting depreciation calculations.

Preventive Maintenance

Scheduled maintenance activities aimed at preventing unexpected equipment failures and prolonging the life of the equipment.

Economic Value

The measure of the benefit provided by a good or service to an economic agent, often represented in terms of willingness to pay for it.