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When a Strategy Is Put in Place to Limit the Rate

Question 151

Multiple Choice

When a strategy is put in place to limit the rate of interest that a firm pays on its debt such that the rate will remain within a stated upper and lower bound, the firm is said to have created an interest rate:


A) Swap.
B) Floor.
C) Cap.
D) Ceiling.
E) Collar.

Correct Answer:

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