Which of the Following Describes the Five-Year Swap Rate

question 3

Multiple Choice

Which of the following describes the five-year swap rate?

• A) The rate on a five-year loan to a AA-rated company
• B) The rate on a five-year loan to an A-rated company
• C) The rate that can be earned over five years from a series of short-term loans to AA-rated companies
• D) The rate that can be earned over five years from a series of short-term loans to A-rated companies

---

Definitions:

Average Weight

The mean mass of a group of objects or individuals, calculated by dividing the total weight by the number of objects or individuals.

Predictors

Variables or factors that are used in statistical models to forecast or estimate another variable of interest.

Best Predictor

A variable or factor that most accurately forecasts or indicates a specific outcome.

Linear Effects

The impact on a dependent variable that is directly proportional to the change in an independent variable.