What Kind of Interest Rate Swap (Of Liabilities) Would an FI

question 11

Multiple Choice

What kind of interest rate swap (of liabilities) would an FI with a positive funding gap utilise to hedge interest rate risk exposure?

• A)swap in floating-rate payments for fixed-rate payments
• B)swap in floating-rate receipts for fixed-rate payments
• C)swap in fixed-rate receipts for floating-rate receipts
• D)swap in floating-rate receipts for fixed-rate receipts

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Definitions:

Eudicots

A major grouping of flowering plants characterized by having two seed leaves, or cotyledons, upon germination.

Pfr

Phytochrome Far-red form, a light-absorbing form of the phytochrome plant photoreceptor, significant in regulating plant development in response to light.

Nerve Cord

A major nervous system component in many animals, typically running along the length of the body and functioning as the central pathway for nerve impulses.

Annelids

A phylum of invertebrate worms known for their segmented bodies, which includes earthworms, leeches, and polychaetes.