Swaps are beneficial because:
A) They are more transactionally efficient instruments.
B) They increase the liquidity in the swap market.
C) They offer longer maturities than forward and futures contracts.
D) All of the above.
E) None of the above.

Question

Quizplus · Accepted Answer

Swaps are beneficial for several reasons: they are transactionally efficient, allowing parties to exchange cash flows or other financial instruments more effectively; they contribute to increased liquidity in the swap market, making it easier for participants to enter and exit positions; and they often offer longer maturities compared to forward and futures contracts, providing more flexibility for long-term financial planning and risk management.

Swaps Are Beneficial Because