What Is a Swap

question 98

Multiple Choice

What is a swap?

• A)An agreement between two parties to exchange assets or a series of cash flows for a specific period of time at a specified interval.
• B)An agreement between a buyer and a seller at time 0 to exchange a nonstandardized asset for cash at some future date.
• C)A contract that gives the holder the right, but not the obligation to buy or sell the underlying asset at a specified price within a specified period of time.
• D)Trading in securities prior to their actual issue.
• E)Contractual commitment to make a loan up to a stated amount at a given interest rate in the future.

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Definitions:

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A conflict fought between Spain and the United States in 1898, resulting in the U.S. gaining territories in the western Pacific and Latin America.

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War fought with Britain, 1812–1814, over issues that included impressment of American sailors, interference with shipping, and collusion with Northwest Territory Indians; settled by the Treaty of Ghent in 1814.

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The expansion and strengthening of a nation's armed forces and related industries, often associated with increased production of military technology and equipment.

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