A pure credit swap will reduce interest rate risk.

Name: A pure credit swap will reduce interest rate risk.
Brand: Quizplus
Rating: 4.8 (40 reviews)

Question

Quizplus · Accepted Answer

A credit swap involves swapping the credit risk of two parties' debt obligations, which can help reduce interest rate risk. The parties involved in the swap typically exchange a fixed-rate payment for a variable-rate payment, or vice versa. By doing so, they can better manage their exposure to changes in interest rates and potentially lower their overall interest payments.

A Pure Credit Swap Will Reduce Interest Rate Risk