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    Intermediate Accounting Study Set 12
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    Exam 4: Complex Financial Instruments
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    If a Company Enters into a Hedging Contract to Swap
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If a Company Enters into a Hedging Contract to Swap

Question 2

Question 2

Multiple Choice

If a company enters into a hedging contract to swap a floating interest rate for a fixed rate, by the end of the contract the interest rate incurred by the company will equal


A) the difference between the fixed and the floating rate.
B) the floating rate.
C) the fixed rate.
D) whichever rate is highest.

Correct Answer:

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