CFA Practice Question

There are 227 practice questions for this study session.

CFA Practice Question

Which statement is false?
A. The fixed rate on an equity swap is simply the fixed rate on a comparable interest rate swap.
B. Currency swaps always involve an exchange of notional amounts at both the initiation and the expiration of the swap.
C. During the life of a forward contract, the forward value is the present value of the difference in forward prices, even if the contract has carry benefits and costs.
Explanation: A is true. The pricing of an equity swap is identical to the pricing of a comparable interest rate swap.

B is false. They often, but not always, involve an exchange of notional amounts.

C is true. The benefits and costs are already incorporated in the forward prices.

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