Answer the following 2 questions about interest rate swap:

1). A firm that issues LT debt and then effectively wants to transform its debt to ST debt can do so by entering into an interest rate swap in which it pays floating and receives fixed.

A. True

B. False

2). A firm that issues LT debt and then effectively wants to transform its debt to ST debt can do so by entering into an interest rate swap in which it pays fixed and receives floating.

A. True

B.False