Free 3I0-013 Exam Braindumps (page: 50)

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What is the "spread" in an interest rate swap (IRS)?

  1. The interest rate differential between the fixed and floating leg of the swap
  2. The brokerage fee for an interest rate swap transaction
  3. The payment made when a swap is terminated
  4. The difference between the swap rate and the benchmark government yield

Answer(s): D



The writer of an options contract:

  1. Bears a risk limited to the premium paid
  2. Bears a substantial risk
  3. Bears a risk limited to the premium received
  4. Bears no risk

Answer(s): B



An American-style option is:

  1. An option traded in USD
  2. An option which can be exercised at any time between the purchase and expiration date
  3. An option based on any US dollar instrument
  4. An option which can be exercised only on its expiry date

Answer(s): B



Which one of the following bonds uses variable rates?

  1. Bond warrants
  2. Reverse convertibles
  3. Zero coupons
  4. Mini-Max (collared) FRN

Answer(s): D






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