The Advantage of a Rate-Capped Interest Rate Swap to a Party

question 41

Multiple Choice

The advantage of a rate-capped interest rate swap to a party exchanging fixed payments for floating payments (relative to a plain vanilla swap) is that

• A)there is a minimum limit set on interest rate payments received.
• B)there is a maximum limit set on the interest payments it will provide.
• C)it receives an up-front fee.
• D)none of the above

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Definitions:

Serious Traffic Accident

A vehicular accident that results in significant damage, injuries, or fatalities.

Purchase Price

The amount of money that is paid to acquire a good, service, or asset.

Discharged

Released from a legal obligation, duty, or liability.

Operation of Law

Changes in rights, duties, or obligations automatically enforced by the legal system without the need for action by the parties involved.