A Advantage of Using Swaps to Hedge Interest-Rate Risk Is

question 7

Multiple Choice

A advantage of using swaps to hedge interest-rate risk is that swaps

• A)are less costly than futures.
• B)can be written for long horizons.
• C)are not subject to default risk.
• D)are more liquid than futures.

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Definitions:

Business Elsewhere

The decision by a customer to take their business to a competitor or alternative provider, usually due to dissatisfaction.

Necessary

Items or services considered essential for basic living and survival, often distinguishing between luxury goods and necessities for legal and economic purposes.

Custom-Made

Items or products that are specifically designed and produced to meet the unique requirements of an individual or entity.

Winter Coat

An article of outdoor clothing designed to provide warmth and protection against cold weather conditions, typically featuring insulation and water-resistant materials.