Identify the CORRECT Statement Below Regarding an Overnight Indexed Swap

question 34

Multiple Choice

Identify the CORRECT statement below regarding an overnight indexed swap (OIS) .

• A)Interest and principal payments are exchanged at the beginning of the swap.
• B)The net settlement is a single payment at the end of the swap term.
• C)The fixed-rate payments are set to be equal to the cash rate.
• D)OISs are usually long-term arrangements.
• E)OISs are used to hedge an exposure to money-market yields.

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Definitions:

Congruent

In agreement or harmony; when two things align or match in terms of shape, size, or position.

Incongruent

Incongruent describes a state or expression that does not align with one's true feelings or thoughts, leading to dissonance and confusion.

Additive

A substance added to something in small quantities to improve or preserve it, often used in the context of food, chemicals, or materials.

Summarization Responses

These refer to concise restatements or encapsulations of content, aimed at capturing the essence of the information presented.