24-59 Consider a Situation Where the Duration of the Fixed

question 49

Multiple Choice

24-59 Consider a situation where the duration of the fixed portion of a swap is greater than the floating portion of a swap.Which of the following statements is most correct?

• A)The fixed-rate payers gain when rates fall.
• B)The market value of fixed-rate payments will decrease by more than the market value of floating-rate payments when interest rates fall.
• C)The market value of fixed-rate payments will decrease by more than the market value of floating-rate payments when interest rates rise.
• D)The floating-rate payers gain when rates rise.
• E)The market value of the swap will increase with an increase in interest rates.

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Definitions:

Accumulating Statement

In programming, a statement that aggregates or sums up values over time, often within a loop.

Accumulating Statement

A statement in programming used to sum or accumulate values over a sequence of iterations.

Initialized

The process of assigning an initial value to a variable at the time of its declaration.