One Reason Swaps Are Desirable Is That

question 38

Multiple Choice

One reason swaps are desirable is that

• A) they are free of credit risk.
• B) they have no transactions costs.
• C) they increase interest rate volatility.
• D) they increase interest rate risk.
• E) they offer participants easy ways to restructure their balance sheets.

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Definitions:

Extrinsic Reward

A reward given to an individual that comes from an external source, typically in the form of tangible rewards or public recognition, to motivate behavior.

Praise

The expression of approval, admiration, or commendation directed towards someone for their achievements or qualities.

Self-Actualization

The realization or fulfillment of one's talents and potentials, considered as a drive or need present in everyone.

Cafeteria Compensation

A flexible employee benefit plan allowing workers to choose from a variety of pre-tax and after-tax benefits, tailored to their personal needs.