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Suppose you enter into an interest rate swap where you are receiving floating and paying fixed. Which one of the following is true? A)Your credit
Suppose you enter into an interest rate swap where you are receiving floating and paying fixed. Which one of the following is true? A)Your credit risk is greater when the term structure is flat. B)Your credit risk is greater when the term structure is downward sloping than when it is upward sloping. C)Your credit risk exposure increases when interest rates decline unexpectedly. D)Your credit risk exposure increases when interest rates increase unexpectedly.
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