In an interest rate cap or floor agreement, the predetermined level of the reference rate that is used to determine when and how much the seller must compensate the buyer is known as:
A) The strike rate.
B) Caption.
C) Flotion.
D) The swap rate.
E) None of the above.
Correct Answer:
Verified
Q6: Swaps are beneficial because:
A) They are more
Q7: Participants in financial markets use interest rate
Q8: In a swap, two parties are exchanging
Q9: When the seller agrees to pay the
Q10: When the seller agrees to pay the
Q12: In a cap or floor, the only
Q13: A cap and a floor can be
Q14: The buyer of a cap benefits if
Q15: The buyer of a floor benefits if
Q16: A cap is equivalent to:
A) A package
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