Which of the Following Statements Is FALSE

question 8

Multiple Choice

Which of the following statements is FALSE?

• A)The swap contract-like forward and futures contracts-is typically structured as a "zero-cost" security.
• B)An interest rate swap is a contract entered into with a bank,much like a forward contract,in which the firm and the bank agree to exchange the coupons from two different types of loans.
• C)In a standard interest rate swap,one party agrees to pay coupons based on a fixed interest rate in exchange for receiving coupons based on the prevailing market interest rate during each coupon period.
• D)If short-term interest rates were to fall while long-term rates remained stable,then short-term securities would fall in value relative to long-term securities,despite their shorter duration.

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Definitions:

Unconscious Mind

That part of the mind which is inaccessible to the conscious mind but that affects behaviors and emotions.

B.F. Skinner

Regarded as one of the most influential psychologists, Skinner is known for his work in behaviorism and the development of the operant conditioning theory.

Psychology

The systematic investigation of mental activities and behaviors.

Cognitive Approach

An approach to psychology emphasizing the mental processes involved in knowing: how we direct our attention, perceive, remember, think, and solve problems.