Financial Institutions Primarily Use Interest Rate Swaps in a Way

question 47

Multiple Choice

Financial institutions primarily use interest rate swaps in a way that will ____ exposure to interest rate risk and ____ potential returns.

• A)increase; increase
• B)increase; reduce
• C)reduce; increase
• D)reduce; reduce

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Definitions:

Confidence Level

The probability that a statistical result is not due to chance, often expressed as a percentage.

Accuracy Level

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or standard.

Sample Size

The number of observations or individuals taken from a population for the purpose of statistical analysis.

Sample Proportion

The sample proportion is a statistic that estimates the proportion of elements in a sample that have a particular attribute, characteristic, or outcome.