Which of the Following Best Describes a Total Return Swap

question 3

Multiple Choice

Which of the following best describes a total return swap?

• A) It exchanges the realized return on an asset, including both income and capital gains/losses, for a return, equal to LIBOR plus a spread on the initial value of the asset
• B) It exchanges the promised return on an asset, including both income and capital gains/losses, for a return equal to LIBOR plus a spread on the initial value of the asset
• C) It exchanges the realized return on an asset, including income but not capital gains/losses, for a return equal to LIBOR plus a spread on the initial value of the asset
• D) It exchanges the promised return on an asset, including income but not capital gains/losses, for a return equal to LIBOR plus a spread on the initial value of the asset

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Definitions:

Affluent Professionals

Individuals with high income and educational levels, often working in professions that require advanced degrees.

Everyday Uses

The common or routine utilizations of objects, technologies, or insights in daily living.

Public Matter

Issues or concerns that affect the broader community or population and are subject to public discussion or governance.

Luxuries

Goods or services that are considered non-essential but desirable, often associated with high quality, exclusivity, and a high price.