24-49 a Swap That Often Involves an Up-Front Fee or Payment

question 64

Multiple Choice

24-49 A swap that often involves an up-front fee or payment as compensation for constandard terms is

• A)a pure credit swap.
• B)a total return swap.
• C)an off-market swap.
• D)a plain vanilla swap.
• E)an interest rate swap.

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Definitions:

Induced Consumption

The portion of consumer spending that changes in response to changes in disposable income.

Disposable Income

The sum of funds that individuals or families can allocate towards savings or expenditure once they've deducted income taxes.

Disposable Income

The liquidity pool available for households to channel into saving and spending after income tax deductions.

Induced Consumption

The part of consumer spending that increases when disposable income rises and decreases when disposable income falls.