Which of the Following Statements Is FALSE

question 8

Multiple Choice

Which of the following statements is FALSE?

• A)The swap contract-like forward and futures contracts-is typically structured as a "zero-cost" security.
• B)An interest rate swap is a contract entered into with a bank,much like a forward contract,in which the firm and the bank agree to exchange the coupons from two different types of loans.
• C)In a standard interest rate swap,one party agrees to pay coupons based on a fixed interest rate in exchange for receiving coupons based on the prevailing market interest rate during each coupon period.
• D)If short-term interest rates were to fall while long-term rates remained stable,then short-term securities would fall in value relative to long-term securities,despite their shorter duration.

---

Definitions:

Defence Mechanisms

Psychological strategies employed by individuals to cope with reality and maintain self-image.

Anxiety Reduction

Strategies or techniques implemented to decrease levels of stress and anxiety.

Displacement

The process of being removed or replaced from a position or location, often due to external factors or decisions.

Depression

A mental health disorder characterized by persistently low mood and a lack of interest in activities, often accompanied by various physiological symptoms.