In a swap arrangement, the most common index used for floating-rate payments would be the

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The most common index used for floating-rate payments in a swap arrangement is the London Interbank Offer Rate (LIBOR), which is used as a benchmark rate for short-term interest rates around the world. It is widely accepted as a standard for pricing and settling financial transactions such as interest rate swaps. The other options listed (coupon rate on existing bonds, stock dividend rate based on a U.S. stock index, and Treasury bond yield) are not typically used as benchmarks for determining floating-rate payments in swap arrangements.

In a Swap Arrangement, the Most Common Index Used for Floating-Rate