An Interest-Rate Swap Converts a Floating-Rate Borrower into a Fixed-Rate

question 15

True/False

An interest-rate swap converts a floating-rate borrower into a fixed-rate borrower.

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Definitions:

Notes Receivable

Written promise (as evidenced by a formal instrument) for amounts to be received.

Retained Earnings

Net income that the corporation retains for future use.

Operating Expenses

Expenses incurred through the normal operations of a business, including rent, utilities, and salaries, but excluding costs of goods sold.

Vertical Analysis

A financial analysis method that lists each line item in a single period financial statement as a percentage of a base line figure.