Which of the Following Is NOT True

question 11

Multiple Choice

Which of the following is NOT true?

• A) Forward rate agreements (FRAs)and interest rate futures are contracts that bet on future movements of the spot rate of interest.
• B) FRAs trade over the counter.
• C) Interest rate futures trade on an organized exchange.
• D) FRAs and interest rate futures are identical contracts in all respects,except that one trades over the counter and the other trades on an exchange.
• E) FRAs have no intermediate cash flows before maturity,and interest rate futures have daily settlement cash flows.

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Definitions:

Credits

Credits refer to the accounting entry that either increases a liability or equity account, or decreases an asset or expense account.

Customer Transaction

An operation between a business and its customer involving the sale or purchase of goods or services.

Invoices

Documents issued by a seller to a buyer that outline the products or services provided, quantities, prices, and terms of payment.

Credit Memos

Documents issued to a customer, indicating a reduction in the amount that the customer owes to the company.