A firm entering into a currency or interest rate swap agreement retains ultimate responsibility for the timely servicing of its own debt obligations.

Question

Quizplus · Accepted Answer

This statement is true as the firm that enters into a swap agreement still has the primary responsibility to make timely payments on its own debt obligations, regardless of any swap agreement it may have in place. The swap agreement simply allows the firm to manage and mitigate its exposure to currency or interest rate fluctuations.

A Firm Entering into a Currency or Interest Rate Swap