Section A (1 Mark)

Section A (1 Mark)

A(n) _________________________ guarantees the swap parties a specific rate of return on their credit asset. Bank A may agree to pay the total return on the loan to Bank B plus any appreciation in the market value of the loan. In return Bank A will often get LIBOR plus a fixed spread plus any depreciation in the value of the loan.
A . credit option
B . Total return Swap
C . credit linked note
D . credit swap

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Answer: B