If the Bank Could Borrow at a Fixed Rate of 10

question 52

Multiple Choice

If the bank could borrow at a fixed rate of 10% for 5 years,what is the notional principal of the swap if the interest fixed payment is $5 million per year?

• A) $80 million
• B) $50 million
• C) $75 million
• D) $80 million.

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Definitions:

Equity Preservation

Strategies or measures taken to maintain or protect the value of an investor's ownership stake in a company.

Venture Capitalist

An investor who provides capital to startup companies and small businesses with perceived long-term growth potential in exchange for equity, or ownership stake.

Potential Venture

A business idea or project that has the possibility of being developed into a successful commercial enterprise.

Vague

Describing something that is unclear, undefined, or not precise in meaning or details.