A transaction in which two firms trade individual financing advantages to produce more favorable borrowing terms for each is know as an):
A) Interest rate swap
B) Sequential short hedge
C) Cross hedge
D) All of the above

Question

Quizplus · Accepted Answer

An interest rate swap is a financial derivative contract in which two parties exchange interest rate cash flows, typically swapping fixed-rate payments for floating-rate payments, to take advantage of their respective borrowing advantages.

A Transaction in Which Two Firms Trade Individual Financing Advantages