An FRA Is Most Like Which of the Following Transactions

question 60

Multiple Choice

An FRA is most like which of the following transactions

• A)an interest rate cap
• B)an interest rate floor
• C)an interest rate collar
• D)a forward contract
• E)none of the above

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Definitions:

Supremacy Clause

A clause in the U.S. Constitution stating that federal law is the "supreme Law of the Land" and takes precedence over state laws.

Federalism

A system of government in which power is divided between a central authority and constituent political units, such as states in the U.S.

Unitary

Refers to a centralized governmental structure where local or provincial divisions have little independent power outside the central authority's directives.

Confederal

Relating to a confederation, which is an alliance between sovereign states, where the central authority has limited powers and the member states retain a high degree of autonomy.