24-47 The cash flows that actually are paid on an interest rate swap depend on
A)the market's expectations of future short-term interest rates.
B)upfront fee payments.
C)varying notional values underlying the swap.
D)special interest rate terms and indexes.
E)actual market rates that materialize over the life of the swap contract.

Question

Quizplus · Accepted Answer

The actual cash flows paid on an interest rate swap are determined by the actual market rates that materialize over the life of the swap contract. The other options listed may have an impact on the terms and structure of the swap, but the actual payments are determined by market rates.

24-47 the Cash Flows That Actually Are Paid on an Interest