Which of the Following Is NOT a Reason That a Swap

question 76

Multiple Choice

Which of the following is NOT a reason that a swap may have less credit risk than an individual loan?

• A)Netting of payments.
• B)Payment flows are interest and not principal.
• C)Standby letters of credit are available.
• D)Swaps can be cancelled, individual loans cannot.
• E)None of these.

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Definitions:

Securities Exchange Act

Legislation governing the secondary trading of securities (stocks, bonds, and debentures) in the United States, aiming to provide transparency and fairness.

Securities Act

A federal law enacted to regulate the offer and sale of securities to protect investors from fraud.

Securities and Exchange Commission

A U.S. federal agency responsible for enforcing federal securities laws and regulating the securities industry, stock and options exchanges.

Securities and Exchange Act

A U.S. law enacted in 1934 to regulate securities transactions on the secondary market, thereby protecting investors and maintaining fair and efficient functioning of the securities markets.