Which of the Below Statements Is FALSE

question 12

Multiple Choice

Which of the below statements is FALSE?

• A) A serious obstacle to accepting the credit arbitrage explanation of the swap market is that opportunities for credit arbitrage should be rare in reasonably efficient international credit markets.
• B) An argument suggested for the growth of the interest rate swap market is the increased volatility of interest rates that has led borrowers and lenders to hedge or manage their exposure.
• C) To reduce the risk of default, today's swap transactions require that the lower credit-rated entity obtain a guarantee from a highly rated commercial bank.
• D) To make money in the swaps market, intermediaries have to do a sufficient volume of business, which is possible only if they have (1) an extensive client base willing to use swaps, and (2) a large inventory of swaps.

---

Definitions:

Anticonformity

The deliberate opposition to social norms and conventions, where individuals choose to behave in ways distinctly different from or against the expected norms.

Independence

The state or condition of being free from reliance on, control by, or influence from others, often associated with self-sufficiency.

Group Size

Refers to the number of individuals forming a social or working group, affecting dynamics and outcomes of group processes.

Social Comparison

The process of comparing oneself to others in order to evaluate or enhance one's own abilities or opinions.