To Determine the Fixed Rate on a Swap,you Would

question 10

Multiple Choice

To determine the fixed rate on a swap,you would

• A)use put-call parity
• B)price it as the issuance of a fixed rate bond and purchase of a floating rate bond or vice versa
• C)use the same fixed rate as that of a zero coupon bond of equivalent maturity
• D)use the continuously compounded rate for the shortest maturity bond
• E)none of the above

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