Which of the Following Statements Is FALSE

question 22

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.

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