The interest rate swap strategy of a firm with fixed rate debt and that expects rates to go up is to:
A) do nothing.
B) pay floating and receive fixed.
C) receive floating and pay fixed.
D) none of the above

Question

Quizplus · Accepted Answer

If a firm expects interest rates to go up and has fixed rate debt, it would benefit from doing nothing because its fixed rate debt will become cheaper relative to the market as rates rise.

The Interest Rate Swap Strategy of a Firm with Fixed