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The Advantage of a Rate-Capped Interest Rate Swap (Relative to a Plain

Question 35

Multiple Choice

The advantage of a rate-capped interest rate swap (relative to a plain vanilla swap) to the party exchanging fixed payments for floating payments is that


A) there is a minimum limit set on the interest rate payments received.
B) there is a maximum limit set on the interest payments it will provide.
C) it receives an up-front fee.
D) None of these are correct.

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