A ____ contract can be viewed as a prepackaged series of forward rate agreements to buy or sell LIBOR at the same fixed rate.
A) swap
B) cap
C) floor
D) collar
E) ceiling

Question

Quizplus · Accepted Answer

This is describing an interest rate swap, where parties agree to exchange fixed and floating interest rate payments. It can be viewed as a series of forward rate agreements because each payment in the swap is essentially a forward rate agreement to buy or sell LIBOR at a fixed rate.

A ____ Contract Can Be Viewed as a Prepackaged Series