Which of the Following Is Not an Interest-Rate Swap

question 17

Multiple Choice

Which of the following is not an interest-rate swap?

• A) A fixed-for-floating swap involving exchange of fixed interest rate payments in one currency for floating payments in the same currency but in which the swap NPV at inception is non-zero.
• B) A floating-for-floating swap in which one floating rate in a currency is exchanged for another floating rate in the same currency.
• C) A fixed-for-floating swap in which a fixed interest rate payment in one currency is exchanged for floating interest-rate payments in another currency.
• D) A fixed-for-floating swap involving exchange of fixed interest rate payments in one currency for floating payments in the same currency but in which the payments are computed on principal that is reduced in a pre-specified manner during the life of the swap.

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Definitions:

Garlic Salt

A seasoning made from a blend of dried, ground garlic and table salt, often with an anti-caking agent to prevent clumping.

Substitutes

Goods or services that can be used in place of one another. When the price of one rises, the demand for its substitute is likely to increase.

Elastic

Describes a situation in which the supply or demand for a good or service is highly responsive to changes in price.

Long Run

A period in economic analysis where all factors of production and costs are variable, allowing for full adjustment to changes in the market or economy.