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.

---

Definitions:

Skin Balm

A topical preparation intended to protect, heal, or soothe the skin.

Toddlers

A developmental stage in children, typically between the ages of one and three, characterized by increased physical mobility, cognitive development, and the beginnings of language acquisition.

Teratogens

Agents, such as chemicals or viruses, that can cause developmental abnormalities or birth defects in an embryo or fetus.

Alcohol

A chemical compound, specifically ethanol, found in beverages like beer, wine, and spirits, that can alter consciousness and impact various bodily functions.