An __________ swap is an agreement between two parties to exchange interest payments for a specific maturity in an agreed upon notional amount.
A) interest rate
B) currency
C) bond
D) currency bond

Question

Quizplus · Accepted Answer

An interest rate swap involves exchanging interest payments between two parties based on an agreed upon notional amount. This notional amount is not actually exchanged between the parties, but is just a hypothetical amount used to calculate the interest payments. This type of swap is commonly used to manage interest rate risk and achieve better borrowing rates.

An __________ Swap Is an Agreement Between Two Parties to Exchange