金融市场与机构Madura题库.doc

Chapter 15 Swap Markets 1. Financial institutions with _________ interest rate-sensitive liabilities than assets are ___________ affected by rising interest rates. A) more; adversely B) fewer; adversely C) more; favorably D) none of the above ANSWER: A 2. Which of the following statements is incorrect? A) Interest rate swaps are sometimes used by financial institutions and other firms for speculative purposes. B) A primary reason for the popularity of interest rate swaps is the existence of market imperfections. C) Swaps are necessary for some financial institutions to obtain the maturities or rate sensitivities on funds that they desire. D) Most financial institutions that anticipate that interest rate will move in an unfavorable direction to not hedge their positions. ANSWER: D 3. Savings institutions participate in the swap market primarily to A) serve as an intermediary by matching up two parties in a swap. B) serve as a dealer by taking the counterparty position in a swap. C) reduce interest rate risk. D) none of the above ANSWER: C 4. In a swap arrangement, the most common index used for floating-rate payments would be the A) coupon rate on existing bonds. B) stock dividend rate based on a U.S. stock index. C) London Interbank Offer Rate (LIBOR). D) Treasury bond yield. ANSWER: C 5. The most likely users of plain vanilla swaps would be A) commercial banks that focus on short-term consumer loans. B) savings institutions. C) manufacturing companies. D) municipal governments. ANSWER: B 6. A plain vanilla swap is especially beneficial when interest rates are expected to A) rise consistently. B) decline consistently. C) be stable. D) rise and then decline. ANSWER: A 7. Swap transactions are only used to A) hedge against upward interest rate movements. B) hedge against downward interest rate movements. C) speculate. D) none of the above ANSWER: D 8. If a firm negotiates a plain vanilla swap, it will provide ______ payment