1. Part A
   1. What hedger do?
      1. Participate in arbitrage activity
      2. Position to avoid risk
      3. Hold position only for a short period of time
      4. Earn speculative profits
2. Part B
   1. Which of the following is not an example of typical floating rate index used in the plain vanilla interest rate swap transaction?
      1. 9-month LIBOR
      2. 3-month LIBOR
      3. 1-year LIBOR
      4. Wall Street Journal Prime
3. Part C
   1. Which of the following is the base index for fixed swap rate quote?
      1. LIBOR
      2. US Treasuries
      3. Swap Rate
      4. Wall Street Journal Prime
4. Part D
   1. Which hedging method presented here matches a 3-month LIBOR loan with a pay 3-month LIBOR received fixed rate swap?
      1. Micro Hedge
      2. Macro Hedge
      3. Swap Hedge
      4. Cross Hedge