Swapping an Obligation to Pay Interest at a Specified Fixed

question 67

Multiple Choice

Swapping an obligation to pay interest at a specified fixed or floating rate for payments representing the total return on a loan or a bond of a specified amount is an example of

• A)a commodity swap.
• B)a credit swap.
• C)a currency swap.
• D)an equity swap.

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Definitions:

Property Income

Income from the ownership of real estate, tangible and intangible property, such as rentals, royalties, and dividends.

Transfer Payments

Financial payments made by governments that do not require an exchange of goods or services in return.

Money Market Fund

A type of mutual fund that invests in short-term, high-quality debt securities, offering investors liquidity and a low risk of loss.

Transfer Payments

Payments made by governments to individuals without any corresponding service or good being provided in return.