A Floating Rate Borrower Who Enters an Interest Rate Swap

question 37

Multiple Choice

A floating rate borrower who enters an interest rate swap as the fixed-rate payer will:

• A)now make fixed rate interest payments to their lender
• B)agree to pay fixed interest payments and receive floating interest payments through the swap contract
• C)receive swap interest payments based on the swap rate
• D)make the swap cash settlement payments when the BBSW exceeds the swap rate.
• E)None of these are correct.

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