A Pay-Fixed Interest Rate Swap Can Be Viewed as Equivalent

question 22

Multiple Choice

A pay-fixed interest rate swap can be viewed as equivalent to

• A) a long position in a par-valued FRN and a long position in a par-valued, fixed-rate note.
• B) a long position in a par-valued FRN and a short position in a par-valued, fixed-rate note.
• C) a short position in a par-valued FRN and a long position in a par-valued, fixed-rate note.
• D) a short position in a par-valued FRN and a short position in a par-valued, fixed-rate note.
• E) a flat position in a par-valued FRN and a short position in a par-valued, fixed-rate note.

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Definitions:

Constructive Conflict

A situation where differing views are debated in a positive, respectful manner, leading to improved decision-making or solutions.

Dysfunctional Conflict

Conflicts that lead to a decline in communication or performance within a group, often resulting in negative consequences for the organization or team.

Group Polarization

The tendency for a group to make decisions that are more extreme than the initial inclination of its members, often in a more conservative or riskier direction.

Production Blocking

A phenomenon where group members have to wait on each other before they can propose their ideas, leading to a slowdown in the creative process.