The Primary Risk in Swaps Is That

question 39

Multiple Choice

The primary risk in swaps is that:

• A) interest rates will not change.
• B) one of the parties will default.
• C) they are highly liquid and the market price will change.
• D) high U.S. government deficits will limit the availability of swaps.

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Definitions:

Rail

A mode of transportation that involves the movement of goods or passengers on trains along a set of tracks.

Carrier

A company or individual that provides transportation services for goods or people.

Straight Bill Of Lading

A document issued by a carrier that specifies the goods being transported are to be delivered to the specified party, without endorsement.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named on the document.