__________ is a contract that fixes an interest rate today on a future loan or deposit
A) inverse floater
B) step-up
C) step-down
D) forward forward

Question

Quizplus · Accepted Answer

A forward forward contract is a contract that fixes an interest rate today on a future loan or deposit. It allows parties to lock in an interest rate for a future transaction, which can provide stability and certainty in a volatile market environment. A step-up or step-down contract refers to a type of bond in which the coupon rate adjusts up or down over the life of the bond. An inverse floater is a type of bond in which the coupon rate moves in the opposite direction of interest rates. These are not relevant to the given context.

__________ Is a Contract That Fixes an Interest Rate Today