A Swap That Involves the Exchange of a Set of Payments

question 9

Multiple Choice

A swap that involves the exchange of a set of payments in one currency for a set of payments in another currency is a(n) ________.

• A) interest-rate swap
• B) currency swap
• C) swaption
• D) notional swap

---

Definitions:

Standard Deviation

A statistical measure of the dispersion or variability in a dataset, often used to quantify the risk of a financial instrument.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to a stable market condition.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the equilibrium price, where supply equals demand.

Supply Curve

A graphical representation of the relationship between the price of a product and the quantity of the product that a supplier is willing and able to supply, holding all other factors constant.