In a(n) ____ swap, two parties agree to exchange payments associated with bonds; in a(n) ____ swap, two parties agree to periodically exchange foreign currencies.

Question

In a(n) ____ swap, two parties agree to exchange payments associated with bonds; in a(n) ____ swap, two parties agree to periodically exchange foreign currencies.​

Quizplus · Accepted Answer

In an interest rate swap, two parties exchange payments associated with bonds, typically involving the exchange of fixed interest rate payments for floating rate payments. In a currency swap, two parties agree to exchange principal and interest payments in different currencies, which involves periodically exchanging foreign currencies.

In A(n) ____ Swap, Two Parties Agree to Exchange Payments