Question 1

The ________ is the value of the reference rate at the FRA's settlement date.

Accepted Answer

A)  notional rate 
B)  going rate 
C)  contract rate 
D)  settlement rate 
A)  notional rate 
B)  going rate 
C)  contract rate 
D)  settlement rate

Question 2

In a ________, the party that wants out of the transaction will arrange for an additional swap in which (1) the maturity on the new swap is equal to the time remaining of the original swap, (2) the reference rate is the same, and (3) the notional principal amount is the same.

Accepted Answer

A)  swap sale 
B)  swap buy-back 
C)  close-out 
D)  swap reversal 
A)  swap sale 
B)  swap buy-back 
C)  close-out 
D)  swap reversal

Question 3

Commercial banks and investment banking firms cannot take positions in swaps but rather simply act as intermediaries.

Accepted Answer

A) True 
 B)False

Question 4

Which of the below statements is TRUE?

Accepted Answer

A)  The convention that has evolved for quoting swaps levels is for a swap dealer to set the floating rate greater than the index and then quote the fixed rate that will apply. 
B)  The swap spread is determined by different factors than what drive the spread over Treasuries on instruments that replicate a swap's cash flows. 
C)  Given that a swap is not a package of futures/forward contracts, the shorter-term swap spreads respond directly to fluctuations in Eurodollar CD futures prices. 
D)  There are three general types of transactions in the secondary market for swaps. These include (1) a swap reversal, (2) a swap sale (or assignment), and (3) a swap buy-back (or close-out or cancellation). 
A)  The convention that has evolved for quoting swaps levels is for a swap dealer to set the floating rate greater than the index and then quote the fixed rate that will apply. 
B)  The swap spread is determined by different factors than what drive the spread over Treasuries on instruments that replicate a swap's cash flows. 
C)  Given that a swap is not a package of futures/forward contracts, the shorter-term swap spreads respond directly to fluctuations in Eurodollar CD futures prices. 
D)  There are three general types of transactions in the secondary market for swaps. These include (1) a swap reversal, (2) a swap sale (or assignment), and (3) a swap buy-back (or close-out or cancellation).

The ________ is the value of the reference rate at the FRA's settlement date.

In a ________, the party that wants out of the transaction will arrange for an additional swap in which (1) the maturity on the new swap is equal to the time remaining of the original swap, (2) the reference rate is the same, and (3) the notional principal amount is the same.

Commercial banks and investment banking firms cannot take positions in swaps but rather simply act as intermediaries.

Which of the below statements is TRUE?

Introduction

Financial Institutions, Financial Intermediaries, and Asset Management Firms

Depository Institutions: Activities and Characteristics

The U.S. Federal Reserve and the Creation of Money

Monetary Policy in the United States

Insurance Companies

Investment Companies and Exchange Traded Funds

Pension Funds

Properties and Pricing of Financial Assets

The Level and Structure of Interest Rates

The Term Structure of Interest Rates

Risk/Return and Asset Pricing Models

Primary Markets and the Underwriting of Securities

Secondary Markets

Treasury and Agency Securities Markets

Municipal Securities Markets

Markets for Common Stock: The Basic Characteristics

Markets for Common Stock: Structure and Organization

Markets for Corporate Senior Instruments: I

Markets for Corporate Senior Instruments: II

The Markets for Bank Obligations

The Residential Mortgage Market

Mortgage-Backed Securities Market

Market for Commercial Mortgage Loans and Commercial Mortgage-Backed Securities

Market for Asset-Backed Securities

Financial Futures Markets

Options Markets

Pricing of Futures and Options Contracts

The Applications of Futures and Options Contracts

Market for Credit Risk Transfer Vehicles: Credit Derivatives and Collateralized Debt Obligations

The Market for Foreign Exchange and Risk Control Instruments

Filters

Exam 30: OTC Interest Rate Derivatives: Forward Rate Agreements, Swaps, Caps, and Floors

The ________ is the value of the reference rate at the FRA's settlement date.

In a ________, the party that wants out of the transaction will arrange for an additional swap in which (1) the maturity on the new swap is equal to the time remaining of the original swap, (2) the reference rate is the same, and (3) the notional principal amount is the same.

Commercial banks and investment banking firms cannot take positions in swaps but rather simply act as intermediaries.

Which of the below statements is TRUE?

Introduction

Financial Institutions, Financial Intermediaries, and Asset Management Firms

Depository Institutions: Activities and Characteristics

The U.S. Federal Reserve and the Creation of Money

Monetary Policy in the United States

Insurance Companies

Investment Companies and Exchange Traded Funds

Pension Funds

Properties and Pricing of Financial Assets

The Level and Structure of Interest Rates

The Term Structure of Interest Rates

Risk/Return and Asset Pricing Models

Primary Markets and the Underwriting of Securities

Secondary Markets

Treasury and Agency Securities Markets

Municipal Securities Markets

Markets for Common Stock: The Basic Characteristics

Markets for Common Stock: Structure and Organization

Markets for Corporate Senior Instruments: I

Markets for Corporate Senior Instruments: II

The Markets for Bank Obligations

The Residential Mortgage Market

Mortgage-Backed Securities Market

Market for Commercial Mortgage Loans and Commercial Mortgage-Backed Securities

Market for Asset-Backed Securities

Financial Futures Markets

Options Markets

Pricing of Futures and Options Contracts

The Applications of Futures and Options Contracts

Market for Credit Risk Transfer Vehicles: Credit Derivatives and Collateralized Debt Obligations

The Market for Foreign Exchange and Risk Control Instruments

Filters