17. a firm with variable-rate debt that expects interest rates to rise may engage in a swap agreement to

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10-11-2022
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17. a firm with variable-rate debt that expects interest rates to rise may engage in a swap agreement to

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komalnavarre23 komalnavarre23 · Answer 1 · 2022-11-14T16:28:06+01:00

The correct answer is B) Pay floating rate and receive a fixed rate. Thus A firm with fix rate debt that expects interest rates to fall may engage in a swap agreement to pay a floating rate and receive a fixed rate.

This statement is correct because the firm is already paying fixed interest on its debt which may fall. So, the firm will swap this agreement using a floating-to-fixed swap in which the firm will going to pay an interest rate (floating rate) and will get a fixed interest rate. Here the firm is already paying a fixed interest rate on its debt so it will not choose to pay a fixed interest rate. It will not swap it with fixed to floating swap.

The complete question is: A firm with fix rate debt that expects interest rates to fall may engage in a swap agreement to:

A) pay fix rate interest and receive floating-rate interest.

B) pay floating rate and receive a fixed rate.

C) pay a fixed rate and receive a fixed rate.

D) pay a floating rate and receive a floating rate.

To learn more about fixed rates please click on the link given: https://brainly.com/question/18511418

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