Which of the Following Statements Regarding Interest Rate Swaps Is

question 88

Multiple Choice

Which of the following statements regarding interest rate swaps is incorrect?

• A) In contrast with a forward contract, the exact terms of exchange of an interest rate swap will change with interest rates.
• B) The two parties exchange net interest difference in an interest rate swap.
• C) An interest rate swap is similar to a forward contract in that it guarantees the exchange of two items of value at some future point in time.
• D) The two parties in an interest rate swap generally have the same level of default risk.

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Definitions:

Unequal Treatment

The unfair and differential treatment of individuals or groups based on characteristics such as race, gender, age, or social status, often leading to discrimination and prejudice.

Racial Group

A social category of people who share distinct physical or genetic traits deemed significant by society.

Affirmative Action

Policies and practices within a society aimed at increasing opportunities for historically marginalized groups by favoring them in areas like education and employment.

Increase Diversity

The act of making a group, organization, or ecosystem more varied in terms of cultural, biological, or other forms of differences.