Portfolio Management【 Reading 57】Sample either, 2012

HuskyGrad2010

At the inception of a market-rate plain vanilla swap, the value of the swap to the fixed-rate payer is:

A) either positive or negative.

B) positive.

C) zero.

---

A market-rate swap is priced so that the value to either side is zero at the inception of the swap

HuskyGrad2010

Over the life of a swap, the price of the swap:

A) does not change.

B) fluctuates with changes in the yield curve.

C) is approximately equal to the market value of the swap.

---

The price of a swap, quoted as the fixed rate in the swap, is determined at contract initiation and remains fixed for the life of the swap.