A payer's 3-month USD LIBOR swap with a remaining term of five years must be reported as:
A) a five-year liability and a three-month asset
B) a five-year asset and a three-month liability
C) a five-year asset only
D) a three-month liability only

Question

Quizplus · Accepted Answer

The payer is paying fixed three-month USD LIBOR and receiving floating five-year USD LIBOR. Therefore, the payer has a liability for the fixed rate payments over the five-year period and an asset for the floating rate payments that they will receive every three months.

A Payer's 3-Month USD LIBOR Swap with a Remaining Term