Who Is Likely to Bear the Greater Counterparty Risk in a Swap

question 24

Multiple Choice

Who is likely to bear the greater counterparty risk in a swap where A pays fixed and B pays floating if interest rates are expected to rise over the life of the swap?

• A) A.
• B) B.
• C) Both A and B.
• D) There is not enough information to determine the correct answer.

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Definitions:

Spearman-Brown

A formula used in psychometrics to estimate the reliability of a test, particularly in relation to the length of the test.

Cronbach's Alpha

A statistical measure used to assess the reliability or internal consistency of a set of test or survey items.

Cultural Sensitivity

The awareness and consideration of cultural differences and similarities when interacting with people from different backgrounds.

Instrument Usefulness

Refers to the effectiveness and efficiency of a tool or device in achieving its intended purpose, especially in research or assessment contexts.