An Agreement Between Two Parties to Exchange a Series of Cash

question 53

Multiple Choice

An agreement between two parties to exchange a series of cash flows similar to those resulting from an exchange of different types of bonds is called a/an:

• A) credit swap.
• B) interest rate swap.
• C) yield curve swap.
• D) notional spread.

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Definitions:

Assimilation

The incorporation of new events or knowledge into existing schemes.

Accommodation

The modification of existing schemes to permit the incorporation of new events or knowledge.

Scheme

An action pattern or mental structure that is involved in the acquisition and organization of knowledge.

Genotype

The genetic form or constitution of a person as determined by heredity.