If a Borrower Has Entered into a FRA and Its

question 66

Multiple Choice

If a borrower has entered into a FRA and its interest cover is specified as 3Mv9M,this means:

• A) nine-month interest rates beginning in three months.
• B) six-month interest rates beginning in three-months.
• C) nine-month interest rates beginning in six months.
• D) six-month interest rates beginning in six months.

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Definitions:

Uncertainty Avoidance

A cultural dimension that describes the degree to which people in a society are uncomfortable with ambiguity and uncertainty.

Security

Measures or protocols taken to protect a person, group, or entity against threats or harmful activities.

Stability

The state of being steady, consistent, and free from significant change or fluctuation.

Low Uncertainty Avoidance

A cultural perspective that tolerates ambiguity and uncertainty, and is more accepting of unstructured situations.