Question: Expectations hypothesis states that forward rate equals the expected future short rate. (True / False) The comparative advantage argument for the popularity of interest rate

Expectations hypothesis states that forward rate equals the expected future short rate. (True / False)

The comparative advantage argument for the popularity of interest rate swaps is based on the assumption that poorly rated firms may be pushed to borrowing in the floating rate market while their first choice is fixed. (True / False)

When value of a swap is negative to one of the parties, the other party faces credit risk. (True / False)

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