Which of the Following Is an Advantage of Having Swap

question 61

Multiple Choice

Which of the following is an advantage of having swap dealers?

• A)They serve the function of taking the opposite side of each transaction in order to keep the swap market liquid.
• B)They reduce the search costs of finding counterparties having mirror image financing requirement.
• C)They generally guarantee swap payments over the life of the contract.
• D)They incur any costs associated with the default by replacing the defaulting party on the same terms as the original swap.
• E)All of the options.

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Definitions:

Russian Ruble

The national currency of Russia, utilized as the medium of exchange within the country.

Appreciate

To increase in value or price over a period of time.

Freely Flexible Exchange Rates

A currency system where the value of a currency is allowed to fluctuate according to the foreign exchange market without direct government intervention.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports of them.