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A Pay-Fixed Interest Rate Swap Can Be Viewed as Equivalent

Question 52

Multiple Choice

A pay-fixed interest rate swap can be viewed as equivalent to


A) A long position in a par valued FRN and a long position in a par valued fixed rate note.
B) A long position in a par valued FRN and a short position in a par valued fixed rate note.
C) A short position in a par valued FRN and a long position in a par valued fixed rate note.
D) A short position in a par valued FRN and a short position in a par valued fixed rate note.
E) None of the above.

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