If You Have Three Years Left on a Five-Year Fixed

question 17

Multiple Choice

If you have three years left on a five-year fixed rate loan paying 2 percent quarterly,and you want to transform it into a floating rate loan using a swap,which of the following would be an appropriate method?

• A) Enter a five-year receive floating,and pay a fixed swap where the swap rate is 2 percent paid quarterly.
• B) Enter a five-year receive fixed,and pay a floating swap where the swap rate is 2 percent paid quarterly.
• C) Enter a three-year receive floating,and pay a fixed swap where the swap rate is 2 percent paid quarterly.
• D) Enter a three-year receive fixed,and pay a floating swap where the swap rate is 2 percent paid quarterly.
• E) Enter a four-year receive fixed,and pay a floating swap where the swap rate is 2 percent paid quarterly.

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Definitions:

Creativity

denotes the ability to produce new and original ideas, solutions, and products that are both novel and useful.

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A leadership framework that encourages leaders to adapt to changing environments and to engage followers in addressing complex challenges.

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Complex problems that require new learning, innovation, and changes in behavior or approach within an organization or community.