Under Which Conditions Would One Be MOST LIKELY to See

question 20

Multiple Choice

Under which conditions would one be MOST LIKELY to see an interest rate swap?

• A)A borrower wants a fixed rate loan,but the bank only offers floating rate loans; the borrower "swaps" loans with someone who has a fixed rate loan
• B)A borrower does not have enough equity for a conforming loan,so he or she takes out a "second" mortgage loan
• C)A borrower does not have enough equity for a conforming loan,so he or she "swaps" mortgage insurance for increased equity investment
• D)A bankruptcy court orders a lender to "swap" a debtor's high interest rate for a lower interest rate

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Definitions:

Urinary Bladder

A hollow muscular organ that stores urine before it is excreted from the body.

Endoderm

The innermost layer of the early embryo, which gives rise to the lining of the digestive and respiratory systems, among other structures.

Neuroectoderm

Part of the ectoderm of an embryo giving rise to the brain and spinal cord.

Postganglionic Autonomic Neurons

Neurons that transmit signals from autonomic ganglia to target organs, involved in the regulation of involuntary bodily functions.