The Asset Swap Spread Is

question 24

Multiple Choice

The asset swap spread is

• A) The spread of the fixed rate over current Libor in an interest-rate swap.
• B) The spread over Libor on the floating leg of a swap to exchange the return from a commodity for a floating rate.
• C) The spread over Libor on the floating leg of an interest-rate swap combined with a fixed coupon asset, such that the package is at par.
• D) The spread over Libor on the floating leg of an interest-rate swap combined with a credit default swap, such that the package is at zero value.

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Definitions:

Dissociate

To formally end association or involvement with a business entity or partnership.

Partnership

A business operation legally established by two or more people sharing both profits and management duties.

Equal Right

The principle that all individuals should have the same rights and opportunities under the law.

Intent

The state of mind with which an act is done, signifying purpose or intention.