Which of the Following Is NOT a Reason for the Credit

question 37

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 more easily than on a loan contract.
• C)Interest rate swaps involve interest,but not principal.
• D)Differences in credit quality between parties can be equalized through the use of standby letters of credit.

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Definitions:

Hans Eysenck

A psychologist known for his work in the fields of personality and intelligence, and for proposing a model of personality based on three dimensions: neuroticism, extraversion, and psychoticism.

Extraverts

Individuals characterized by their outgoing, socially confident, and energetic nature, often seeking stimulation from the external environment.

Genetic Factors

Components of an individual's genetic makeup that influence traits, behaviors, and susceptibility to certain conditions or diseases.

Identical Twins

Twins that originate from the same fertilized egg and share exactly the same genetic material.