The most basic type of interest rate swap is the ____.
A) fixed for floating rate swap
B) exchange-rated swap
C) LIBOR for prime rate swap
D) interest rate rights offering

Question

Quizplus · Accepted Answer

The most basic and common type of interest rate swap is the fixed for floating rate swap. In this type of swap, one party agrees to pay a fixed interest rate to another party in exchange for receiving a floating or variable interest rate from them. This allows both parties to mitigate their interest rate risk and potentially reduce their borrowing costs. Options B, C, and D are not commonly recognized types of interest rate swaps.

The Most Basic Type of Interest Rate Swap Is the ____