Consider a Swap to Pay Currency a Floating and Receive

question 15

Multiple Choice

Consider a swap to pay currency A floating and receive currency B floating.What type of swap would be combined with this swap to produce a swap to produce a plain vanilla swap in currency B.

• A)pay currency B floating,receive currency A fixed
• B)pay currency B fixed,receive currency A floating
• C)pay currency B fixed,receive currency A fixed
• D)pay currency B floating,receive currency A floating
• E)none of the above

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Definitions:

Marginal Revenue

The extra financial gain from selling an additional unit of a product or service.

Profit

The profit earned when the revenue generated from a business operation surpasses all its associated expenses, costs, and taxes required for the operation.

Competitive Market

A market structure characterized by a large number of buyers and sellers, where no single participant can significantly influence price or supply.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit.