The Primary Risk in Swaps Is That

question 39

Multiple Choice

The primary risk in swaps is that:

• A) interest rates will not change.
• B) one of the parties will default.
• C) they are highly liquid and the market price will change.
• D) high U.S. government deficits will limit the availability of swaps.

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Definitions:

Unloaded Gun

A firearm that does not contain any ammunition in its chamber or magazine.

Mens Rea

A legal term from Latin meaning "guilty mind"; it denotes the mental state or intent a person must have at the time of committing a crime for it to be intentional.

Actus Reus

The physical act or unlawful omission that constitutes the execution of a crime, as opposed to the mental intent to commit it.

M'Naghten Test

A legal criterion for determining insanity, which holds that a defendant is not responsible for their criminal actions if, due to a mental disorder, they did not understand the nature of their acts or did not know right from wrong.