What is a swap?
A)An agreement between two parties to exchange assets or a series of cash flows for a specific period of time at a specified interval.
B)An agreement between a buyer and a seller at time 0 to exchange a nonstandardized asset for cash at some future date.
C)A contract that gives the holder the right, but not the obligation to buy or sell the underlying asset at a specified price within a specified period of time.
D)Trading in securities prior to their actual issue.
E)Contractual commitment to make a loan up to a stated amount at a given interest rate in the future.

Question

Quizplus · Accepted Answer

A swap is an agreement between two parties to exchange assets or a series of cash flows for a specific period of time at a specified interval. A swap can involve exchanging interest rates, currencies, commodities, or other financial instruments. The goal of a swap is typically to manage risk or to achieve a specific investment objective.

What Is a Swap