The Student Loan Marketing Association (SLMA)has Short Term Student Loans

question 52

Multiple Choice

The Student Loan Marketing Association (SLMA) has short term student loans funded by long term debt.To hedge out this interest rate risk SLMA could ______________.
I.engage in a swap to pay fixed and receive variable interest payments
II.engage in a swap to pay variable and receive fixed interest payments
III.buy T-bond futures
IV.sell T-bond futures

• A) I and II only
• B) I and IV only
• C) II and III only
• D) II and IV only

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