The Disadvantage of Swaps Is That

question 60

Multiple Choice

The disadvantage of swaps is that

• A) they lack liquidity.
• B) it is difficult to arrange for a counterparty.
• C) they suffer from default risk.
• D) they are all of the above.

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Definitions:

Formula Unit

The lowest whole number ratio of ions represented in an ionic compound.

Ionic Compound

A chemical substance wherein ions are connected via electrostatic forces, a phenomenon termed as ionic bonding.

Aluminum Foil

A thin sheet of aluminum metal that is used for cooking, packaging, insulating, and other applications due to its lightweight and non-corrosive properties.

Element

A substance that cannot be broken down into simpler substances by chemical means, consisting of atoms with the same number of protons.