31. The most basic and common type of swap is called (Points : 1) basis swap plain vanilla swap plain paper swap commercial swap bond swap

Question 32. 32. An interest rate swap with both sides paying a floating rate is called a (Points : 1)

plain vanilla swap two-way swap floating swap spread swap basis swap

Question 33. 33. Consider a swap to pay currency A floating and receive currency B floating. What type of swap would be combined with this swap to produce a swap to produce a plain vanilla swap in currency B. (Points : 1)

pay currency B floating, receive currency A fixed pay currency B fixed, receive currency A floating pay currency B fixed, receive currency A fixed pay currency B floating, receive currency A floating none of the above

Question 34. 34. For a currency swap with $10 million notional principal, the notional principal in British pounds if the exchange rate is $1.55 is (approximately) (Points : 1)

11.55 million 15.5 million 10 million 6.45 million none of the above

Question 35. 35. A currency swap without the exchange of notional principal is most likely to be used in what situation? (Points : 1)

a company issuing a bond a company generating cash flows in a foreign currency a company arranging a loan a dealer trying to hedge a currency option none of the above

Question 36. 36. Which of the following distinguishes equity swaps from currency swaps? (Points : 1)

equity swap payments are always hedged equity swap payments are made on the first day of the month equity swap payments can be negative equity swap payments have more credit risk none of the above

Question 37. 37. Find the upcoming net payment in a plain vanilla interest rate swap in which the fixed party pays 10 percent and the floating rate for the upcoming payment is 9.5 percent. The notional principal is $20 million and payments are based on the assumption of 180 days in the payment period and 360 days in a year. (Points : 1)

fixed payer pays $1,950,000 fixed payer pays $950,000 floating payer pays $1 million floating payer pays $50,000 fixed payer pays $50,000

Question 38. 38. Find the upcoming payment interest payments in a currency swap in which party A pays U. S. dollars at a fixed rate of 5 percent on notional principal of $50 million and party B pays Swiss francs at a fixed rate of 4 percent on notional principal of SF35 million. Payments are annual under the assumption of 360 days in a year, and there is no netting. (Points : 1)

party A pays $2,500,000, and party B pays SF1,400,000 party A pays SF1,400,000, and party B pays $2,500,000 party A pays SF1,750,000, and party B pays SF1,400,000 party A pays $2,500,000, and party B pays $2,000,000 party A pays $50 million, and party B pays SF35 million

Question 39. 39. Find the net payment on an equity swap in which party A pays the return on a stock index and party B pays a fixed rate of 6 percent. The notional principal is $10 million. The stock index starts off at 1,000 and is at 1,055.15 at the end of the period. The interest payment is calculated based on 180 days in the period and 360 days in the year. (Points : 1)

party B pays $851,500 parry B pays $48,500 party B pays $251,500 party A pays $251,500 party A pays $851,500

Question 40. 40. Find the approximate upcoming net payment on an equity swap in which party A pays the return on stock index 1 and party B pays the return on stock index 2. The notional principal is $25 million. Stock index 1 starts the period at 1500 and goes up to 1600 at the end of the period. Stock index 2 starts the period at 3500 and goes up to 3300 at the end of the period. (Points : 1)

The party paying index 1 pays about $238,000 The party paying index 2 pays about $238,000 The party paying index 2 pays about $3.095 million The party paying index 1 pays about $25 million The party paying index 1 pays about $3.095 million