What Is the Special Feature of an Off-Market Swap Arrangement

question 16

Multiple Choice

What is the special feature of an off-market swap arrangement?

• A)It involves special nonstandard considerations that must be negotiated between the parties.
• B)The swap is used to hedge against exchange rate risk from mismatched currencies on assets and liabilities.
• C)It involves additional financing costs resulting from the fixed-fixed currency swap.
• D)It involves an obligation to pay interest at a fixed or floating rate for payments representing the total return on a specified amount.

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Definitions:

Structural Unemployment

A type of joblessness resulting from a disparity between the abilities available in the workforce and the competencies required by businesses.

Manufacturing Jobs

Employment in industries that produce goods using labor and machines, typically within a factory or production facility.

Unemployment Insurance

A government program that provides financial assistance to unemployed workers, helping to mitigate the loss of income during periods of joblessness.

Frictional Unemployment

This refers to the short-term unemployment that arises from the process of matching workers with jobs, typically when individuals are transitioning between jobs, entering the workforce, or changing locations.