If a US Institution in a Forward Swap Would Like to Lock

question 44

Multiple Choice

If a U.S. institution in a forward swap would like to lock in the fixed rate that it will pay when the swap period begins, it is probably concerned that interest rates will ____; the counterpartyis likely adversely affected by ____ interest rates.

• A) increase; increasing
• B) increase; declining
• C) decrease; declining
• D) decrease; increasing
• E) none of the above

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Definitions:

High Levels

High Levels typically refer to an amount or concentration of a substance or variable that is considerably above what is considered normal or average.

Commitment

A pledge or promise to do something, often implying dedication and perseverance in personal or professional contexts.

Companionate Love

A form of love characterized by deep affection, friendship, and emotional intimacy, often found in long-term relationships where passion may have faded but a strong bond remains.

Intimate

Characterized by a close, personal, and usually affectionate or loving personal relationship.