The Timing of Plain Vanilla Swap Payments Is Generally

question 48

Multiple Choice

The timing of plain vanilla swap payments is generally:

• A)at the end of the swap period (i.e.in arrears)
• B)quarterly for plain-vanilla swaps with terms up to three years
• C)half-yearly for plain-vanilla swaps with terms more than three years
• D)in arrears, but uses the BBSW at the start of the swap period.
• E)All of these are correct.

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Definitions:

Estimated Useful Life

The expected period over which an asset is anticipated to be used by a business.

Leasehold

An interest in an asset that gives the holder the right to use it for a specified period of time, typically relating to property or land.

Lessor

The party in a lease agreement who owns the asset and grants the lessee the right to use the asset for a specified period.

Lessee

The party in a lease agreement who uses or occupies the leased asset and is obligated to pay the lease payment to the lessor.