Which of the Following Is Not a Reason for the Credit

question 15

Multiple Choice

Which of the following is not a reason for the credit risk on a swap to be less than the credit risk on a loan?

• A) Swap contracts often extend beyond the maturity of normal loan contracts.
• B) Swap payments can be netted across more than on contract.
• C) Interest rate swaps involve interest, but not principal.
• D) Swap contracts often extend beyond the maturity of normal loan contracts, swap payments can be netted across more than on contract and Interest rate swaps involve interest, but not principal.

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