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Basic Question 1 of 2
An interest rate swap is identical to ______.
II. issuing a fixed-rate bond in one currency, converting the proceeds to the other currency, and using the proceeds to purchase a floating-rate bond denominated in the other currency
III. issuing a floating-rate bond and using the proceeds to purchase a fixed-rate bond
IV. issuing a floating-rate bond and using the proceeds to buy a stock index portfolio
I. issuing a fixed-rate bond and using the proceeds to purchase a floating-rate bond
II. issuing a fixed-rate bond in one currency, converting the proceeds to the other currency, and using the proceeds to purchase a floating-rate bond denominated in the other currency
III. issuing a floating-rate bond and using the proceeds to purchase a fixed-rate bond
IV. issuing a floating-rate bond and using the proceeds to buy a stock index portfolio
User Contributed Comments 4
| User | Comment |
|---|---|
| danlan2 | II is not, it's more than interest rate swap |
| Masterkang | II is a version of currency Swap |
| epiziL2 | And IV is an equity swap |
| quanttrader | I and III represent counterparties in the swap transaction |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe how interest rate swaps are priced, and calculate and interpret their no-arbitrage value;
CFA® 2026 Level II Curriculum, Volume 5, Module 31.