Which of the Following Statements Is False

question 28

Multiple Choice

Which of the following statements is false?

• A) Corporations use interest rate swaps routinely to alter their exposure to interest rate fluctuations. Firms can use interest rate swaps with duration-hedging strategies.
• B) The value of a swap, while initially zero, will fluctuate over time as interest rates change.
• C) An interest rate that adjusts to current market conditions is called a floating rate.
• D) When interest rates rise, the swap's value will rise for the party receiving the fixed rate; conversely, it will fall for the party paying the fixed rate.