A Limitation of Interest Rate Swaps Is That There Is

question 22

True/False

A limitation of interest rate swaps is that there is a risk to each swap participant that the counterparty could default on its payments.

---

Definitions:

Adjustment of Debts

A legal process that allows individuals or organizations to reorganize their debts to manage and pay them off.

Individual

A single human being as distinct from a group, class, or family, often used in legal and social contexts to distinguish between collective and personal aspects.

Bankruptcy Act

Legislation governing the process through which individuals or entities unable to meet their financial obligations can seek relief from some or all of their debts.

List of Creditors

A documented record of all individuals or entities to whom a debtor owes money, often compiled in bankruptcy proceedings.