Succession of forward contracts on interest rates

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Reference no: EM131952899

1. If a US bank has variable-rate assets in US dollars and fixed-rate liabilities in Euros, the bank is exposed to

interest rate increases and an appreciation of the dollar.

interest rate declines and an appreciation of the dollar.

interest rate increases and a depreciation of the dollar.

interest rate declines and a depreciation of the dollar.

zero exposure to interest rate and exchange rate exposures.

2. A swap that technically is a succession of forward contracts on interest rates is

a commodity swap.

a credit swap.

a currency swap.

an equity swap.

an interest rate swap.

Reference no: EM131952899

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