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To Reduce the Possibility of Loss in an Interest Rate

Question 9

Multiple Choice

To reduce the possibility of loss in an interest rate swap, the parties involved in the swap can


A) trade the interest rate payments but not the principal payments.
B) to fund the fixed rate assets with variable-rate liability interest payments.
C) to fund the variable rate assets with fixed-rate liability interest payments.
D) to match the maturity of the assets and liabilities.

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