A ____ contract can be viewed as a prepackaged series of forward rate agreements to buy or sell LIBOR at the same fixed rate.
A) Swap
B) Cap
C) Floor
D) Collar
E) None of the above

Question

Quizplus · Accepted Answer

A swap contract involves exchanging cash flows based on different financial instruments or rates. In this case, the contract involves a series of forward rate agreements to buy or sell LIBOR at a fixed rate, which matches the definition of a swap. Cap, floor, and collar contracts all involve options to limit risk, but do not match the description given in the question.

A ____ Contract Can Be Viewed as a Prepackaged Series