When a Bank Participates in a Swap of Fixed Interest

question 13

Multiple Choice

When a bank participates in a swap of fixed interest rate payments for floating-rate payments, or a swap of currencies, it

• A)can match up two parties but cannot take a position in the swap.
• B)can match up two parties or can take a position in the swap.
• C)cannot match up two parties and cannot take a position in the swap.
• D)cannot match up two parties but can take a position in the swap.

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Definitions:

Principle Parts

The essential components or sections of a mechanism or system that are critical to its functioning.

Atom

The smallest constituent unit of ordinary matter that constitutes a chemical element.

No Charge

A state or condition where an object does not have a net electrical charge, meaning it has an equal number of protons and electrons.

Neutron

One of the principal parts of an atom. The neutron has no charge and is part of the nucleus.