Which of the Following Factors Does Not Affect the Valuation

question 14

Multiple Choice

Which of the following factors does not affect the valuation of a variable notional equity swap that pays the equity return in exchange for Libor?

• A) Expected equity price growth.
• B) Equity volatility.
• C) Interest-rate term structure.
• D) All of the above.

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Definitions:

Biological Parents

The individuals from whom one inherits their genetic traits, typically referred to as the mother and father.

Canalized

A term referring to traits that are strongly influenced by genetic factors and less affected by environmental conditions.

Species-Typical Characteristics

Traits or behaviors that are common and normative within a particular species.

Language Acquisition

The process by which humans acquire the capacity to perceive, produce, and use words to understand and communicate.