24-75 Which of the Following Describes the Process of "Netting

question 39

Multiple Choice

24-75 Which of the following describes the process of "netting" in the swap market?

• A)Stripping out the "interest rate" sensitive element of total return swaps to reduce the net portfolio risk.
• B)Acting as an intermediary by bringing together two FIs with opposing interest rate risk exposures to enter into a swap agreement.
• C)Turning fixed-rate liabilities into net variable-rate liabilities.
• D)Calculating the net difference between the two payments,and making a single payment for the net difference.
• E)Squaring off contracts on or before expiry.

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Definitions:

Culturally-Distinct

Having unique cultural characteristics that differentiate one group or society from others.

Prototypical Emotion

A basic, universally recognized emotion that serves as a model for understanding and categorizing emotional experiences.

Compassion

A feeling of deep sympathy and sorrow for another who is stricken by misfortune, accompanied by a strong desire to alleviate the suffering.

Jealousy

A complex emotion that encompasses feelings ranging from fear of abandonment to rage and humiliation, often triggered by the threat of losing something or someone of personal value.