CFA Level I sample question

CFA Level I Forward Commitment and Contingent Claim Features and Instruments question

Derivatives / Forward Commitment and Contingent Claim Features and Instruments

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Forward Commitment and Contingent Claim Features and Instruments sample question

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Derivatives

Forward Commitment and Contingent Claim Features and Instruments

A company pays a floating market reference rate plus a spread on USD 200 million of debt that resets quarterly. The treasurer wants to lock in a known interest cost for the next five years, insists on zero initial cost, and is willing to give up any benefit from falling rates. The most appropriate instrument is:

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