Question #26
Reading: Reading 31 Valuation of Contingent Claims
PDF File: Reading 31 Valuation of Contingent Claims.pdf
Page: 13
Status: Unattempted
Correct Answer: A
Question
A payer swaption gives its holder:
Answer Choices:
A. the right to enter a swap in the future as the floating-rate payer
B. an obligation to enter a swap in the future as the fixed-rate payer
C. the right to enter a swap in the future as the fixed-rate payer
Explanation
A payer swaption give its holder the right to enter a swap in the future as the fixed-rate
payer.