A Bond Investor Who Is Worried About Future Fluctuations in Interest

question 38

Multiple Choice

A bond investor who is worried about future fluctuations in interest rates could:

• A) enter into a swap to pay both a fixed and a floating rate.
• B) enter into a swap to pay a fixed rate and receive a floating rate.
• C) enter into a swap to pay a floating rate and pay a fixed rate.
• D) enter into a swap to receive both a fixed and a floating rate.

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Definitions:

Context

The circumstances or setting surrounding an event, statement, or idea, which can significantly affect its meaning and interpretation.

Standard Quantifier

A logical operator that specifies the quantity of specimens in the domain of discourse that satisfy a given condition.

Some

An unspecified amount or number of people or things.

Non-categorical

Relating to statements or propositions that do not fit into the standard categorical framework of logic, often not expressing a straightforward assertion about sets and their members.