QUESTION 44 Which of the following describes the process of "netting" in the swap market? O a. Squaring off contracts on or before expiry. O b. Tuming fixed-rate liabilities into net variable-rate liabilities O c. Calculating the net difference between the two payments, and making a single payment for the net difference. Od. Stripping out the "interest rate" sensitive element of total return swaps to reduce the net portfolio risk Oe. Acting as an intermediary by bringing together two Fls with opposing interest rate risk exposures to enter into a swap agreement. QUESTION 45 When are the standby letters of credit used in swap agreements? O a. When the no-arbitrage condition does not hold good. Ob Where the swap agreement is made between parties of equal credit standing. Oc When one party posts collateral in lieu of default. Od. Where the swap agreement is made between high-quality counterparties. e. When the counterparty is perceived to be of significantly lower credit quality than the other party