Which of the Following Statements Is FALSE

question 8

Multiple Choice

Which of the following statements is FALSE?

• A)The swap contract - like forward and futures contracts - is typically structured as a 'zero-cost' security.
• B)If short-term interest rates were to fall while long-term rates remained stable, then short-term securities would fall in value relative to long-term securities, despite their shorter duration.
• C)An 'interest rate swap' is a contract entered into with a bank, much like a forward contract, in which the firm and the bank agree to exchange the coupons from two different types of loans.
• D)In a standard interest rate swap, one party agrees to pay coupons based on a fixed interest rate in exchange for receiving coupons based on the prevailing market interest rate during each coupon period.

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Definitions:

Defective

Pertaining to a product or good that fails to meet quality standards or is unfit for its intended use due to flaws or errors.

Defendant's Control

The extent to which a defendant has the ability or power to manage, direct, or influence events or outcomes in a legal case.

Market Share Theory

Product liability theory which holds that when it is impossible to identify the manufacturer of a particular product that caused harm, the plaintiff may sue all manufacturers of the product, with liability apportioned among them on the basis of each one’s market share.

Products Liability Action

A legal claim against a manufacturer or seller for producing or selling a defective product causing injury or damage.