24-61 a Swap Can Be Effectively Hedged Against Interest Rate

question 52

Multiple Choice

24-61 A swap can be effectively hedged against interest rate risk by

• A)selling out to another party.
• B)entering into another swap agreement that is the mirror image of the original swap.
• C)setting interest sensitive assets equal to interest sensitive liabilities.
• D)setting asset duration equal to liability duration.
• E)defaulting to the swap intermediary.

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Definitions:

Environmental Protection Agency

A U.S. federal agency tasked with regulating environmental matters and implementing laws to protect human health and the environment.

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A landmark legal case where the EPA was found to have the authority to regulate greenhouse gas emissions under the Clean Air Act.