Which of the Following Is NOT an Advantage of Having

question 9

Multiple Choice

Which of the following is NOT an advantage of having an interest rate swap market?

• A) As it is generally liquid, it benefits both borrowers and lenders.
• B) As most swaps involve banks, their credit departments can carry out credit assessments more easily than potential lenders.
• C) As the banks are involved in most swaps, banks require a spread between the two interest rates.
• D) Swaps enable companies to carry out regulatory and tax arbitrage.

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