The Type of Swap Most Closely Linked to the Subprime

question 5

Multiple Choice

The type of swap most closely linked to the subprime mortgage crisis is the ________.

• A)interest rate swap
• B)currency swap
• C)equity linked swap
• D)credit default swap
• E)DIF swap

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is used globally to prepare public company financial statements.

Operating Cash Flow

The cash generated by a company’s normal business operations, indicating whether the company can maintain and grow its operations.

Sales Revenues

Income received from selling goods or services over a period of time before any costs or expenses are deducted.

Capital Cost Allowance

A form of tax depreciation that allows businesses in Canada to deduct the cost of a depreciable property over several years.