Total Return Swaps (TRSs)are Sometimes Undertaken Between Banks Who Can

question 21

Multiple Choice

Total return swaps (TRSs) are sometimes undertaken between banks who can access an asset on-balance-sheet and funds that lack access to,or are not allowed to,hold the asset.In such a situation,

• A)The bank is using the TRS to enhance its credit exposure to the underlying asset.
• B)The fund is making the bank assume risk that it does not itself wish to assume.
• C)The bank is enhancing its return at the expense of the fund.
• D)The bank is effectively lending the use of its balance sheet to the fund.

---

Definitions:

Blood Serum

The clear, yellowish fluid part of blood that remains after clotting factors have been removed.

Pacemaker

A medical device implanted in the body to regulate the heart rate by delivering electrical impulses.

Heart Conduction

The process by which electrical signals are transmitted through the heart's cells, initiating its contraction and coordinating heartbeat.

Electrical Transmission

The process of conveying electricity over a distance, typically from a power plant to the consumer using transmission lines.