An Agreement Between Two Parties to Exchange a Series of Specified

question 28

Multiple Choice

An agreement between two parties to exchange a series of specified periodic cash flows in the future based on some underlying instrument or price is a(n)

• A)forward agreement.
• B)futures contract.
• C)interest rate collar.
• D)option contract.
• E)swap contract.

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Definitions:

Washing

Typically refers to cleaning something by immersing and agitating it in water or another liquid.

Conditional Contract

An agreement that becomes enforceable only after certain conditions are met or fulfilled.

Condition Precedent

In a contract, an event that must occur in order for a party’s duty to arise.

Math

is a field of study concerned with the investigation of patterns, quantities, and spatial relationships through the use of numbers and symbols.