Company X Issues Variable-Rate Debt but Wishes to Fix Its

question 30

Multiple Choice

Company X issues variable-rate debt but wishes to fix its interest rates because it believes the variable rate may increase.Company Y has a fixed-rate bond but is looking for a variable-rate interest because it assumes the interest rates may decrease.The two companies agree to exchange cash flows.Such an arrangement is called:

• A)a futures contract.
• B)a forward contract.
• C)a swap.
• D)an option.

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Definitions:

Physical Changes

Alterations in the body's structure or function that can be seen or measured, often associated with growth, aging, or health conditions.

Coordination

The ability to use different parts of the body together smoothly and efficiently.

Synaptic Pruning

A neurological process that reduces the number of synapses, or connections between neurons, to enhance the efficiency of neural networks.

Corpus Callosum

A thick band of nerve fibers that divides the cerebrum into left and right hemispheres, facilitating communication between the two sides of the brain.