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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Definitions:

Market Area

The geographic region or demographic group served by a business or organization.

Divisional Structure

An organizational layout where operations are divided into separate divisions based on product, service, market, or geographic region, each with its own set of functions.

Same Product

Identical items or services offered under different names or by different companies, often with no significant difference in function or quality.

Same Area

Referring to either a physical space where activities or operations are conducted by a group or to a field of expertise or interest that individuals share.