8.

Which of the following statements is FALSE?

Select one:

a. The value of a swap, while initially positive, will over time converge to zero as interest rates change.

b. Corporations use interest rate swaps routinely to alter their exposure to interest rate fluctuations. Firms can use interest rate swaps with duration-hedging strategies.

c. An interest rate that adjusts to current market conditions is called a floating rate.

d. When interest rates rise, the swap's value will rise for the party receiving the floating rate; conversely, the value will fall for the party receiving the fixed rate.