One Reason Swaps Are Desirable Is That

question 38

Multiple Choice

One reason swaps are desirable is that

• A) they are free of credit risk.
• B) they have no transactions costs.
• C) they increase interest rate volatility.
• D) they increase interest rate risk.
• E) they offer participants easy ways to restructure their balance sheets.

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Definitions:

Predominant Influence

Predominant influence refers to the dominant effect or control one factor or entity has over others within a particular context or situation.

Shared Acquisition

The process by which individuals or groups collectively obtain knowledge, skills, or assets.

Symbolic Function

The ability to use a mental symbol, a word, or an object to stand for or represent something that is not physically present.

Thinking

The mental process of considering, reflecting, or reasoning about problems, ideas, or subjects.