While the initial motivation for the swap market was borrower exploitation of what were perceived to be credit arbitrage opportunities, such opportunities are limited and depend on the presence of market imperfections.

Question

Quizplus · Accepted Answer

This statement is true. The swap market was initially created to allow borrowers to exploit perceived credit arbitrage opportunities, but such opportunities are limited and depend on market imperfections.

While the Initial Motivation for the Swap Market Was Borrower