What Is the Special Feature of an Off-Market Swap Arrangement

question 4

Multiple Choice

What is the special feature of an off-market swap arrangement?

• A)It involves special nonstandard considerations that must be negotiated between the parties.
• B)The swap is used to hedge against exchange rate risk from mismatched currencies on assets and liabilities.
• C)It involves additional financing costs resulting from the fixed-fixed currency swap.
• D)It involves an obligation to pay interest at a fixed or floating rate for payments representing the total return on a specified amount.
• E)FI receives the par value of the loan on default in return for paying a periodic swap fee.

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Definitions:

Performance

The process of performing or executing an action, task, or function, typically evaluated against established norms of precision, thoroughness, and quickness.

Empowerment

is the process of providing individuals or groups with the tools, resources, and authority to make decisions and effect change.

Authority

The faculty to govern, resolve issues, and secure compliance.

Self-Control

The skill to manage one's emotional states, cognitive processes, and actions in situations presenting temptations and spontaneous impulses.