Swaps Provide a Real Economic Benefit to the Counterparties Only

question 22

Multiple Choice

Swaps provide a real economic benefit to the counterparties only if a barrier exists to prevent ______ from functioning fully.

• A)hedging
• B)factoring
• C)arbitrage
• D)forfaiting

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Definitions:

Liability

A legal obligation or responsibility that entails financial compensation or other actions to remedy damages or breaches of contract.

Certified Public Accountant

A professional accountant who has passed the required examination and met all other state and educational licensing requirements to be certified by the state.

Liabilities

Financial obligations or debts that a business or individual owes to others, which need to be settled over time.

Marketable Securities

Financial instruments that can be easily converted into cash, typically with high liquidity and short maturity periods.