Which of the Following Is Not a Way to Terminate

question 3

Multiple Choice

Which of the following is not a way to terminate a swap:

• A)the two counterparties cash settle the market value
• B)enter into an opposite swap with another counterparty
• C)hold the swap to its maturity date
• D)use a forward contract or option on the swap to enter into an offsetting swap
• E)borrow the notional amount and pay off the counterparty

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Definitions:

Private Placement

The sale of securities to a relatively small number of select investors as a way of raising capital.

Sophisticated Investor

An investor with significant experience, assets, and knowledge, capable of making well-informed financial decisions and understanding risks.

Accredited Investor

An individual or entity recognized as having the financial sophistication and capacity to bear the risk of investment opportunities that demand less regulatory disclosure.

Securities

Tradable financial assets including stocks, bonds, and options, which represent an investment and a means for entities to raise capital.