Which one of the following terms is correctly identified?
A) Caption: a price cap on a call option.
B) Floor: a call option on an interest rate.
C) Derivative: an asset with a value that is derived from some specified future event.
D) Swaption: an option to exchange a floating-rate loan for a fixed-rate loan.
E) Cross-hedge: an agreement to exchange specified cash flows at specified time intervals in the future.
Correct Answer:
Verified
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