Which of the Following Is Not an Advantage of the Swap

question 12

Multiple Choice

Which of the following is not an advantage of the swap market over the futures market for managing interest rate risk?

• A)Getting out of a contract is easier in the swap market.
• B)With a swap contract, you can hedge away longer-term risks than with futures contracts.
• C)The notional amount of the swap can be set to any value acceptable to both trading parties.
• D)All of the above are advantages of the swap market over the futures market.
• E)a.and c.are not advantages of the swap market over the futures market.

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Definitions:

Cash Discount

A deduction from the invoice price offered by the seller to the buyer for prompt payment of their bill.

Discount Date

The specified date by which payment of a bill or invoice is required to avail a discount for early payment.

Delivery Charge

A fee charged for the delivery of goods or services to a recipient's location.

Cash Discount

A reduction in the price of an item or service offered to a buyer for immediate payment or within a predefined time.