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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