Some of the Risks That a Swap Dealer Confronts Are

question 35

Multiple Choice

Some of the risks that a swap dealer confronts are "basis risk" and "sovereign risk." They are defined as

• A)"basis risk" refers to the probability that a country will impose exchange restrictions on a currency involved in a swap, and "sovereign risk" refers to a situation in which the floating rates of the two counterparties are not pegged to the same index.
• B)"basis risk" refers to a situation in which the floating rates of the two counterparties are not pegged to the same index and "sovereign risk" refers to the probability that a country will impose exchange restrictions on a currency involved in a swap.
• C)"basis risk" refers to interest rate changing unfavorably before the swap bank can lay off to an opposing counterparty the other side of an interest rate swap entered into with a counterparty, and "sovereign risk" refers to the probability that a country will impose exchange restrictions on a currency involved in a swap.
• D)"basis risk" refers to the risk of fluctuating exchange rates, and "sovereign risk" refers to a situation in which the floating rates of the two counterparties are not pegged to the same index.

Knowledge of scientific uncertainty related to global warming impacts, including ocean roles and insect population changes.

Recognize the possible outcomes of global warming, including biodiversity loss, sea-level rise, and food production impacts.

Understand the approaches and strategies to minimize global warming and ozone depletion, including governmental and individual actions.

Grasp the implications of CFC's characteristics and their environmental impact, especially on the ozone layer.

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Definitions:

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Physical Barrier

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