Johnson Industries Is Currently Paying a Variable Rate Loan and Desires

question 52

Multiple Choice

Johnson Industries is currently paying a variable rate loan and desires greater certainty with regard to their loan payments. Refinancing is currently not available so they decide to pursue an interest rate swap agreement. Which of the following will help Johnson stabilize their anticipated cash outflows? Enter into an agreement to:

• A)Receive LIBOR and pay a quoted rate.
• B)Receive a quoted rate and pay LIBOR + 1.50%.
• C)Receive LIBOR and pay LIBOR + 1.50%.
• D)None of the above will help Johnson Industries pay a fixed amount for their obligations.

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Definitions:

Nervous Systems

The complex network of nerves and cells that carry messages to and from the brain and spinal cord to various parts of the body.

Cross-Sequential Research

An approach that combines the longitudinal and cross-sectional methods by following individuals of different ages for abbreviated periods of time.

Longitudinal

A research design in which the same subjects are observed or tested repeatedly over a period of time.

Cross-Sectional

A type of study or analysis that examines data from a population at a single point in time.