The main difference between the "short-form" and "forward" methods of pricing a floating-rate note is:
A) The short-form method gives lower prices than the forward method.
B) The short-form method gives higher prices than the forward method.
C) The short-form method does not require knowledge of the entire forward term structure of interest rates.
D) The short-form method does not use the entire forward term structure of interest rates and hence results in less accurate prices.
Correct Answer:
Verified
Q2: A bank makes long-term fixed-rate loans, and
Q3: A plain vanilla interest-rate swap is an
Q4: Which of the following is not true
Q5: An important difference between a floating-rate note
Q6: The main difference between the "short-form" and
Q7: Choose the most appropriate of the following
Q8: An amortizing interest-rate swap is one in
Q9: You enter into a $100 million notional
Q10: In a plain vanilla fixed-for-floating swap,
A) Fixed
Q11: Firm A can borrow at 4%
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