Interest-Rate Swaps Are

question 56

Multiple Choice

Interest-rate swaps are:

• A)Exchanges of equity securities for debt securities.
• B)Agreements between two parties to exchange periodic interest-rate payments over some future period.
• C)Agreements involving swapping of option contracts.
• D)Agreements that allow both parties to convert floating interest rates to fixed interest rates.

---

Definitions:

Consolidation Worksheet

An accounting tool used to combine the financial statements of a parent company and its subsidiaries, enabling the preparation of consolidated financial statements.

Initial Value Method

A method of investment accounting where the investment is initially recorded at cost, without subsequent adjustments for changes in fair value.

Equity Income

Income earned from investments in shares of companies, often received as dividends, indicating profit participation in these companies.

Internal Accounting Records

Documents and ledgers used within an organization to track financial transactions, operational data, and other key financial information.