To Find the Swap Rate for a 3-Year Swap, You

question 82

Multiple Choice

To find the swap rate for a 3-year swap, you would

• A)take the arithmetic average of the 1-, 2-, and 3-year forward rates.
• B)take the geometric average of the 1-, 2-, and 3-year forward rates.
• C)bootstrap the LIBOR yield curve.
• D)none of the above

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Definitions:

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A problem lacking clear objectives, constraints, and/or possible solutions, often requiring creative thinking for resolution.

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