The advantage of a rate-capped interest rate swap to a party exchanging fixed payments for floating payments (relative to a plain vanilla swap) is that
A) there is a minimum limit set on 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 the above
Correct Answer:
Verified
Q9: Sovereign risk differs from credit risk because
Q14: _ risk in a swap is typically
Q17: In a period when interest rates are
Q22: According to the text, any political aspects
Q26: A firm is involved in an agreement
Q27: The typical purchaser of an interest rate
Q31: _ risk prevents the interest rate swap
Q36: An advantage of a _ over other
Q38: Financial institutions primarily use interest rate swaps
Q39: When a bank participates in a swap
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