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    Financial Markets and Institutions
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    Exam 30: OTC Interest Rate Derivatives: Forward Rate Agreements, Swaps, Caps, and Floors
  5. Question
    If Contract Rate > Settlement Rate, Then the Interest Differential
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If Contract Rate > Settlement Rate, Then the Interest Differential

Question 37

Question 37

True/False

If contract rate > settlement rate, then the interest differential equals:
(settlement rate - contract rate) × (days in contract period / 360) × notional amount

Correct Answer:

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