A Payer Swaption Is Expiring

question 2

Multiple Choice

A payer swaption is expiring.The underlying swap has a two year maturity.Th e present value factors are 0.9259 (one year) and 0.8651 (two years) .The strike rate is 7 percent.What is the value of the swaption per $1 notional amount.

• A)0.0000,since it is out-of-the-money
• B)1.0000
• C)0.0753
• D)0.0095
• E)none of the above

---

Definitions:

Classical Conditioning

A teaching technique that pairs two stimuli together repeatedly, so that a response initially elicited by the second stimulus is later elicited by the first stimulus alone.

Dog Trainer

A professional who applies behavior analysis to teach, train, or assist dogs to obey commands or undertake specific tasks.

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without prior conditioning.

Unconditional Statement

A statement that is absolute and does not depend on any conditions or variables for its validity.