When a Savings Institution Uses Interest Rate Swaps to Hedge

question 56

Multiple Choice

When a savings institution uses interest rate swaps to hedge interest rate risk, it would likely exchange ____ outflows for ____ inflows.

• A)variable-rate; fixed-rate
• B)variable-rate; variable-rate
• C)fixed-rate; variable-rate
• D)fixed-rate; fixed-rate

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Definitions:

Narcotic

Substances that bring about numbness or a stuporous condition, often used for pain relief but can be highly addictive.

Dissociation

A psychological state in which a person disconnects from their thoughts, feelings, memories, or sense of identity.

Mental Processes

Internal, covert activities of our minds such as thinking, feeling, and reasoning.

Streams Of Awareness

William James's concept referring to the continuous flow of thoughts, feelings, and sensations that constitute an individual's conscious experience.