A Key Use of Interest-Rate Swaps Is To

question 51

Multiple Choice

A key use of interest-rate swaps is to:

• A) eliminate risk for both parties involved in the transaction.
• B) earn the fees for constructing the swaps.
• C) provide a hedge against interest-rate risk.
• D) manage government revenues.

---

Definitions:

Logistics

The detailed organization and implementation of a complex operation involving the movement of goods, services, or information from origin to consumption.

Conflicting Business Laws

Situations where different laws or regulations, possibly from different jurisdictions, apply to the same business activity, creating a conflict that businesses must navigate.

Promote Diversification

A strategy aimed at reducing risk by allocating investments among various financial instruments, industries, and other categories.