Which of the Following Statements About Municipal Swaps Is INCORRECT

question 16

Multiple Choice

Which of the following statements about municipal swaps is INCORRECT?

• A) A municipal swap has a state,local,or municipal government as counterparty.
• B) Municipal swaps are often sold through auctions.
• C) Many government entities use swaps and other derivatives for managing their cash flows.
• D) Due to privacy concerns,governments rely on regular employees for designing and executing swaps and rarely seek outside help.
• E) Municipal swaps face counterparty risk,basis risk,termination risk,rollover risk,and amortization risk.

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Definitions:

Valuing Diversity

The appreciation and incorporation of different backgrounds, cultures, and perspectives in a group or organization to enhance creativity and problem-solving.

Stereotype Threat

Members of a social group feel they might be judged or treated according to a stereotype and that their behaviour and/or performance will confirm the stereotype.

Halo Effect

A cognitive bias where an impression created in one area influences opinion in another area.

Similar-To-Me Effect

A rater gives more favourable evaluations to people who are similar to the rater in terms of background or attitudes.