34.

Which combination of the following statements is true about a swap bank?

(i) - it is a generic term to describe a financial institution that facilitates swaps between counterparties

(ii) - it can be an international commercial bank

(iii) - it can be an investment bank

(iv) - it can be a merchant bank

(v) - it can be an independent operator

A.

(i) and (ii)

B.

(i), (ii) and (iii)

C.

(i), (ii), (iii) and (iv)

D.

(i), (ii), (iii), (iv) and (v)

35.

A swap bank

A.

can act as a broker, bringing together counterparties to a swap.

B.

can act as a dealer, standing ready to buy and sell swaps.

C.

both a and b

D.

only sometimes a but never ever b

36.

In the swap market, which position potentially carries greater risks, broker or dealer?

A.

Broker

B.

Dealer

C.

They are the same swaps, therefore the same risks.

37.

Suppose the quote for a five-year swap with semiannual payments is 8.508.60 percent. The means

A.

the swap bank will pay semiannual fixed-rate dollar payments of 8.50 percent against receiving six-month dollar LIBOR.

B.

the swap bank will receive semiannual fixed-rate dollar payments of 8.60 percent against paying six-month dollar LIBOR.

C.

both a and b

D.

none of the above