A firm is involved in an agreement in which it makes payments in periods when a market interest rate falls below an interest rate level specified in the agreement. This means that the firm has
A) purchased an interest rate cap.
B) sold an interest rate cap.
C) purchased an interest rate floor.
D) sold an interest rate floor.
Correct Answer:
Verified
Q14: _ risk in a swap is typically
Q17: In a period when interest rates are
Q30: An interest rate swap agreement indicates the
Q31: _ risk prevents the interest rate swap
Q33: A plain vanilla swap enables firms to
Q35: An arrangement which enables firms to exchange
Q36: An advantage of a _ over other
Q36: The advantage of a rate-capped interest rate
Q37: A firm is involved in an agreement
Q39: An interest rate collar represents the _
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