Loading…
CMFASPrepStudyingRES5
Switch exam
Financial advisory
RES5Financial Advisory Services✓A dealer explains a plain-vanilla IRS to a corporate that has a S$50 million floating-rate loan at SORA + 1.5% and fears rising rates. Which statements are CORRECT? (a) The corporate should pay fixed and receive floating. (b) After the swap, its all-in cost is the swap fixed rate plus the 1.5% loan margin. (c) The notional of S$50 million is exchanged at the start. (d) If SORA falls, the corporate still pays the fixed rate on the swap. Which of the following are CORRECT?
Pay fixed / receive floating converts the loan to fixed (a); the loan margin remains on top (b); notional is never exchanged in an IRS (iii wrong); the fixed leg is owed regardless of where SORA goes (d).
The hedge removes the benefit of falling rates too.
Practise more RES 2B OTC Derivatives: Products & Mechanics questions
Exam-style questions with worked answers, then full timed mocks. Free to start.
Build a daily practice habit — a few exam-style questions a day, with worked answers. Free to start.
Start practising →Original study material mapped to the public CMFAS RES 2B syllabus. Unofficial, not endorsed by MAS or IBF. Verify figures and rules against current guidance before relying on them.