A Key Use of Interest-Rate Swaps Is To

question 107

Multiple Choice

A key use of interest-rate swaps is to:

• A)Eliminate risk for both parties involved in the transaction.
• B)Earn the fees for constructing the swaps.
• C)Provide a hedge against interest-rate risk.
• D)Manage government revenues.

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Definitions:

°

A symbol used to denote degrees in measures of angles, temperature, or quality.

Pythagorean Theorem

A theorem that states that the square of the sides of a right triangle are equal to the square of the hypotenuse.

Hypotenuse

In a right-angled triangle, the longest side, which sits opposite the right angle.

Opposite Side

In geometry, it refers to the side facing away in relation to another side, often in triangles or other polygons.