Question
On June 1, 2014, A and B enter into a contract with a term of 5 years. Pursuant to the contract, beginning 6/1/2015 A must
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On June 1, 2014, A and B enter into a contract with a term of 5 years. Pursuant to the contract, beginning 6/1/2015 A must make a payment to B in an amount equal to LIBOR (determined on the date immediately preceding June 1), multiplied by $500,000,000. Each June 1, beginning in 2015, B must make a payment to A equal to 2% times $500,000,000. The contract is an example of:
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Notional principal contract
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Forward contract
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Futures contract
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Option contract
On June 1, 2014, A and B enter into a contract with a term of 5 years. Pursuant to the contract, beginning 6/1/2015 A must make a payment to B in an amount equal to LIBOR (determined on the date immediately preceding June 1), multiplied by $500,000,000. Each June 1, beginning in 2015, B must make a payment to A equal to 2% times $500,000,000. The contract is an example of:
-
Notional principal contract
-
Forward contract
-
Futures contract
-
Option contract
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Sound Investing, Chapter 21 - Cash From Operations Cons
Authors: Kate Mooney
1st Edition
0071719431, 9780071719438
